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Markets drag as Infosys disappoints

Markets drag as Infosys disappoints
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First Published: Tue, Jul 13 2010. 11 20 AM IST
Updated: Tue, Jul 13 2010. 11 20 AM IST
Mumbai: Indian shares were trading 0.1% lower on Tuesday, led by technology stocks, as investors ignored a guidance upgrade by Infosys Technologies and concentrated on a rare drop in its June quarter earnings.
Weak Asian shares also added to the negative sentiment, led by Chinese stocks which fell 2% on reports Beijing will not ease tougher property measures any time soon.
Shares in Infosys, which scaled new peaks in the last two sessions, were down 3.1%, after it said net profit in the June quarter fell to Rs1,490 crore ($318 million) from 15.3 billion rupees a year ago.
“People will now adjust their expectations for other IT majors like TCS and Wipro,” said Tejas Doshi, head of research at Sushil Finance.
“The share prices of IT companies had run up on a lot of expectations ... probably more than what was warranted.”
By 11:14am, the 30-share BSE Index was trading down 0.12% at 17,915.33 points with 13 of its components declining. The benchmark which had rallied 81% in 2009, is up 2.6% so far in 2010.
Investors will watch out corporate earnings for April-June for cues in the near term. “We expect a 22% to 25% growth in earnings for Sensex companies for the June quarter,” said Deven Choksey, managing director and CEO of KR Choksey Shares. “The direction for guidance is also likely to be positive.”
Foreign funds have invested $7.1 billion in Indian equities so far in 2010, after a record inflow of $17.5 billion in 2009.
Other software majors Tata Consultancy Services and Wipro were down 2.4% and 1.7% respectively.
Leading mobile operators Bharti Airtel and Reliance Communications dragged lower on continued concerns of margin erosion due to lower tariffs and growing competition. The stocks were down 1.7% and 1% respectively.
Lenders continued to gain on expectations of better loan demand as the economy grows.
Late last week, Trade Minister Anand Sharma told Reuters India’s gross domestic product growth is expected to return to “9% plus” this year, led by strong corporate performance and rising savings levels.
Top lender State Bank of India was up nearly 1% while private sector rivals ICICI Bank and HDFC Bank rose 0.5% each.
Mortgage lender Housing Development Finance Corp climbed 1.7%.
In the broader market, gainers outnumbered losers in a ratio of 1.4:1 in a volume of 130 million shares.
The 50-share NSE index was down 0.1% at 5,377.20 points.
STOCKS
CMC, which offers customer services like IT solutions and system integration, was up 2.4% at 1,520.05 rupees as it reported late Monday its June-quarter consolidated net profit was Rs464.5 million.
Unichem Laboratories rose 2.3% to Rs480 after the drugmaker said on Monday said it will consider a stock split at its board meeting scheduled on 22 July.
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First Published: Tue, Jul 13 2010. 11 20 AM IST
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