IT major and index heavyweight Infosys led losses for key benchmark indices, with the stock sliding after the company cut full year revenue growth guidance in dollar terms. The barometer index, the S&P BSE Sensex, fell 167.35 points or 0.62% at 26,912.16, as per the provisional closing data. The 50-unit CNX Nifty dropped 46.10 points or 0.56% at 8,143.60, as per the provisional closing data. The Sensex provisionally settled below the psychological 27,000 level after falling below that mark in mid-afternoon trade.
The Sensex and the Nifty reversed direction after both these key benchmark indices struck their highest level in more than 7 weeks at the onset of the trading session.
The market breadth indicating the overall health of the market was negative. On BSE, 1,443 shares declined and 1,303 shares rose. A total of 123 shares were unchanged. The BSE Mid-Cap index was provisionally up 0.15%. The BSE Small-Cap index was provisionally up 0.03%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2381 crore, lower than turnover of Rs 2878.40 crore registered during the previous trading session.
Shares of IT major Infosys edged lower in choppy trade after the company lowered its full year revenue growth guidance in dollar terms for the year ending 31 March 2016 (FY 2016) at the time of announcement of Q2 September 2015 results. The stock was off 3.93% at Rs 1,122. The stock hit a high of Rs 1,219 in intraday trade, which is a record high for the counter. The stock hit a low of Rs 1,108.90 in intraday trade. Infosys now expects its revenue to grow 6.4%-8.4% in dollar terms for FY 2016. At the time of announcing Q1 June 2015 results, Infosys had forecast revenue growth of 7.2%-9.2% in dollar terms for FY 2016.
The revenue growth guidance for FY 2016 has been kept unchanged at 10%-12% in constant currency terms.
Thanks to weakness of the rupee against the dollar, Infosys has raised full year revenue growth guidance in rupee terms. Infosys now expects its revenue to grow 13.1%-15.1% in rupee terms in FY 2016. At the time of announcing Q1 June 2015 results, Infosys had forecast 11.5%-13.5% growth in the company's revenue in rupee terms for FY 2016. The revised guidance is based on rupee dollar exchange rate of 65.59.
Infosys' consolidated net profit rose 12.1% to Rs 3398 crore on 8.9% growth in revenue to Rs 15635 crore in Q2 September 2015 over Q1 June 2015. The results are as per International Financial Reporting Standards (IFRS). The result was announced during market hours today, 12 October 2015.
Meanwhile, Rajiv Bansal has stepped down as Chief Financial Officer (CFO) of Infosys effective 12 October 2015. Ranganath M. D. has been appointed as the new CFO.
Most other IT stocks declined after Infosys cut its full year revenue growth guidance in dollar terms at the time of announcement of its second quarter results. MindTree (down 2.33%), Wipro (down 1.38%) and Oracle Financial Services Software (down 1.66%) edged lower. Tech Mahindra (up 0.03%) and HCL Technologies (up 0.74%) edged higher.
TCS fell 1.6% at Rs 2,587.90. The company announces its Q2 September 2015 results tomorrow, 13 October 2015.
Index heavyweight and housing finance firm HDFC was off 1.37% at Rs 1,273. The stock hit a high of Rs 1,294.50 and a low of Rs 1,263 in intraday trade.
Another index heavyweight and cigarette major ITC was down 0.71% at Rs 340.80. The stock hit a high of Rs 348 and a low of Rs 338.75 in intraday trade.
Pharma stocks were mostly lower. Lupin (down 2.01%), Sun Pharmaceutical Industries (down 1.32%), Dr Reddy's Laboratories (down 1.59%), Cipla (down 1.55%), Ipca Laboratories (down 0.07%) and Strides Arcolab (down 0.1%) edged lower. GlaxoSmithkline Pharmaceuticals (up 0.2%), Glenmark Pharmaceuticals (up 2.23%), Divi's Laboratories (up 0.12%) and Wockhardt (up 0.35%) edged higher.
Bank of Baroda (BoB) tumbled 3.29% at Rs 176.30 after the Central Bureau of Investigation (CBI) began a probe under the Prevention of Corruption Act, 1988 against 59 current account holders of Bank of Baroda and unknown officials of the state-run bank and some private persons. The allegation is that the current account holders of the bank and bank officials conspired to send overseas remittances of foreign exchange worth approximately Rs 6000 crore in illegal and irregular manner in violation of established banking norms under the garb of payments towards suspected non-existent imports. The CBI began investigation into the case after a complaint from Bank of Baroda.
In overseas stock markets, European stocks edged lower, taking a breather from a solid rally last week. Chinese stocks led gains in Asian markets on stimulus measures from China and signals of reform in China's telecommunications sector. In mainland China, the Shanghai Composite ended with gains of 3.28%. China's central bank announced over the weekend that it will expand a relending trial to nine more cities and provinces, including Shanghai and Beijing. The plan, currently in place in Shandong and Guangdong, allows banks to pledge certain assets to secure loans from the central bank.
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