Mumbai: Accelerating inflation and lower-than-expected fourth quarter results from Infosys Technologies Ltd led to a weak closing in Indian stocks. The weak guidance from Infosys also weighed on investor sentiment. Data released by the government showed that inflation in March accelerated to 8.98%. Combined with rising crude oil prices, it lead to a total rout. Brent crude resumed their up-trend and have hit $122 a barrel mark on Friday.
Sensex: 19,386 –1.57%
Nifty: 5,824 –1.47%
Apart from automobiles and capital goods, all sectoral indices closed in losses. The BSE’s IT index lost the most. Higher inflation also impacted banking and real estate stocks. Investors are worried that high inflation will leave RBI with little option but to raise key rates policy further.
BSE IT: 6,258 –6.40%
BSE Realty: 2,410 –1.22%
BSE Bankex: 13,382 –0.95%
BSE Power: 2,775 –0.87%
The weak guidance by Infosys Technologies sparked concerns about the growth of Indian IT industry. (Read more) Investors and analysts are worried that other Indian IT companies might face similar headwinds and give weaker guidance.
Infosys Technologies: Rs 2,988 –9.59%
Wipro: Rs 449 –5.04%
Core Projects: Rs 317 –3.87%
HCL Technologies: Rs 482 –3.03%
The fear of high interest rates came back to haunt real estate stocks. Investors sold real estate stocks on concerns that high interest rates might make people wary of buying properties.
Ackruti City: Rs 228 –4.31%
DB Realty: Rs 110 –3.84%
Peninsula Land: Rs 57 –2.72%
Unitech: Rs 44 –2.65%
However, not all stocks lost ground on Friday. Investors continued to buy Hero Honda stock. The company’s board approved an interim dividend of Rs 70 per share on Wednesday. Larsen & Toubro was also able to end the day with gains. According to Reuters, the company is in talks to sell its electrical and electronics unit. Read more
Hero Honda: Rs 1,841 +6.10%
Dr Reddy’s Laboratories: Rs 1,656 +1.27%
Bajaj Auto: Rs 1,414 +1.15%
Larsen & Toubro: Rs 1,725 +0.42%