Post results rally in IT major and index heavyweight Infosys helped key benchmark indices trim initial losses. At 10:21 IST, the barometer index, the S&P BSE Sensex, was down 244.26 points or 0.98% at 24,609.85. The losses for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently off 78.70 points or 1.04% at 7,483.70. Weakness in global stocks hit sentiment adversely on the domestic bourses. Infosys jumped after the company raised its revenue growth guidance for the year ending 31 March 2016 (FY 2016) at the time of announcement of its third quarter results.
The broad market depicted weakness. There were more than five losers against every gainer on BSE. 1,812 shares fell and 317 shares rose. A total of 96 shares were unchanged. The BSE Mid-Cap index was currently down 1.66%. The BSE Small-Cap index was currently down 1.96%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The Sensex fell 380.89 points or 1.53% at the day's low of 24,473.22 in early trade. The barometer index lost 202.81 points or 0.81% at the day's high of 24,651.30 in morning trade. The Nifty fell 118.60 points or 1.56% at the day's low of 7,443.80 in early trade. The index fell 68.80 points or 0.9% at the day's high of 7,493.60 in morning trade.
In overseas market, Japanese stocks led losses for Asian stocks after a broad selloff in US stocks overnight. The Nikkei 225 Average was currently off 4.11%. US stocks slumped yesterday, 13 January 2016, as a rout in oil prices heightened worries about the global economy.
Infosys jumped after the company raised its revenue growth guidance for the year ending 31 March 2016 (FY 2016) at the time of announcement of its third quarter results during market hours today, 14 January 2016. The stock was currently up 5.06% at Rs 1,137.10. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 2% to Rs 3465 crore on 1.7% increase in revenue to Rs 15902 crore in Q3 December 2015 over Q2 September 2015.
Infosys now expects its revenue to grow 8.9%-9.3% in dollar terms for the year ending 31 March 2016 (FY 2016). At the time of announcement of Q2 September 2015 results, Infosys had forecast 6.4%-8.4% growth in the company's revenue in dollar terms for FY 2016. The revenue growth guidance in constant currency terms has been raised to 12.8%-13.2% from previous 10%-12%.
Thanks to weakness of the rupee against the dollar, Infosys has raised revenue growth guidance in rupee terms. Infosys now expects its revenue to grow 16.2%-16.6% in rupee terms for the year ending 31 March 2016 (FY 2016). At the time of announcement of Q2 September 2015 results, Infosys had forecast 13.1%-15.1% growth in the company's revenue in rupee terms for FY 2016. The revised guidance is based on rupee-dollar exchange rate of 66.16.
Most IT stocks edged higher after rupee fell below 67 mark against the US dollar. MindTree (up 1.79%), HCL Technologies (up 1.57%), Oracle Financial Services Software (up 0.10%), Tech Mahindra (up 0.10%), Hexaware Technologies (up 0.09%), MphasiS (up 0.08%) and TCS (up 0.06%), edged higher. Wipro (down 0.38%) and Persistent Systems (down 0.76%), edged lower. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
In the foreign exchange market, the partially convertible rupee was currently hovering at 67.16, compared with its close of 66.855 during the previous trading session.
Metal shares declined. Jindal Steel & Power (down 3.72%), Vedanta (down 2.84%), Hindalco Industries (down 2.8%), Bhushan Steel (down 2.32%), Steel Authority of India (down 2.21%), JSW Steel (down 2.16%), Hindustan Copper (down 1.58%), National Aluminium Company (down 1.49%), Hindustan Zinc (down 0.57%) and NMDC (down 0.4%), edged lower.
Tata Steel was down 4.92% to Rs 234.85 after the company announced after market hours yesterday, 13 January 2016, that the sharp fall in international steel prices has triggered a downgrade of the company's corporate credit rating by Standard and Poor (S&P) by 1 notch.
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