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Markets drop; Infosys dives 7.9% as earnings disappoint

Markets drop; Infosys dives 7.9% as earnings disappoint
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First Published: Fri, Apr 15 2011. 12 59 PM IST
Updated: Fri, Apr 15 2011. 12 59 PM IST
Mumbai: Markets in Indian software bellwether Infosys Technologies tumbled nearly 8% on Friday after the company’s earnings disappointed, and pushed the broader market down.
The country’s second-largest outsourcing firm lagged market expectations despite a 13.7% rise in quarterly profit, hurt by higher expenses in a seasonally weak quarter.
Kicking off the results for the nearly $60 billion Indian outsourcing sector, Infosys reported net profit of 18.2 billion rupees ($408.5 million), up from 16 billion rupees a year ago.
“Infosys has a history of generally beating market expectations. So the street is disappointed. The market may now bring down expectations for the entire IT pack,” said Gajendra Nagpal, CEO of Unicon Financial in New Delhi.
Infosys shares were down 7.9% and was the sixth-most traded on the National Stock Exchange. Around 4.1 million shares were traded in the first hour of trade, already four times their 90-day average daily volume.
Peers Tata Consultancy Services and Wipro were down 1.6% and 3.6% respectively.
At 10:13am, the 30-share BSE index was down 0.78% at 19,543.54 points. Seventeen of its components declined.
The benchmark has climbed 9.6% since the start of March, as foreign funds pumped in $3 billion after being net sellers in January and February. For the year to date, the index is down 4.7%.
The 50-share NSE index was down 0.7% at 5,867.75. Losers and gainers were almost equal in number on the NSE, with 120 million shares changing hands.
Banks advanced ahead of March wholesale inflation data due by 12:00pm.
The wholesale price index probably rose 8.36% in March from a year earlier, slightly higher than February’s 8.31% rise as fuel and manufacturing prices continued to climb, a Reuters poll showed earlier this week.
Leading lenders State Bank of India , ICICI Bank and HDFC Bank were up between 0.1% and 0.8%.
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Fame India rose 5.1% to Rs 54.85 after its board said it would consider rights issue on 19 April.
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First Published: Fri, Apr 15 2011. 12 59 PM IST
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