Benchmarks slump as Infosys’ Q4 result disappoints

Friday's trading session turned out to be a daunting one for stock markets in India and benchmarks ended below their crucial 27,500 (Sensex) and 8,350 (Nifty) levels with a cut of over a percentage points. Sentiments remained down-beat since beginning of the trade on report that foreign institutional investors were net sellers in equities to the tune of Rs 277 crore on Thursday, as per provisional stock exchange data. Sentiments also remained dampened after Infosys reported lower-than-expected Q4 numbers. The IT bellwether reported a net profit of Rs 3,097 crore and revenue of Rs 13,411 crore, while dollar revenue came in lower-than-expected down 2.7% at $2,159 for the March quarter.

Sentiments also got weighed down after global rating agency Moody’s said that a growth rate of more than 7.5 percent may not be sustainable for India in the present scenario and the country needs to resolve tax issues that are impacting its investment climate. Meanwhile, foreign traders remained watchful despite minister of state for finance Jayant Sinha’s efforts to clear doubts on the Minimum Alternate Tax (MAT) on foreign funds. Investors are worried, even though the minister stated that funds invested through Mauritius and Singapore -countries with which India has treaty for tax exemption on capital gains-will be untouched.

On the global front, European markets made a firm start and were trading in green in early deals, boosted by encouraging earnings reports, with investors also cautiously optimistic over the prospects of a deal over Greece's debt crisis. However, Asian markets ended the Friday’s trade mixed, though some of the indices extended their weekly gains, some others closed with cuts of around half a percent.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 63.57 per dollar at the time of equity markets closing compared to its previous close of 63.32. Selling in software and technology counters too dampened the sentiments after IT bellwether, Infosys reported disappointing set of Q4 numbers. Earlier, TCS had reported a 1.6 per cent growth in dollar revenues, while HCL Tech grew at 2.7 per cent and Wipro posted a 1.2 per cent growth. Bank shares too edged lower on concerns that unseasonal rains would lead to severe crop damages as a result of which non-performing loans in the agri-segment would rise thereby hurting profits. Additionally, public sector oil marketing companies (OMCs) declined as crude oil prices surged.

The NSE’s 50-share broadly followed index Nifty declined by over ninety points to end below the psychological 8,350 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dropped by around three hundred points to finish below the psychological 27,500 mark. Broader markets too witnessed bloodbath and ended the session with a cut of around two percentage points. The market breadth remained in favour of decliners, as there were 684 shares on the gaining side against 2,080 shares on the losing side while 99 shares remain unchanged.

Finally, the BSE Sensex declined by 297.08 points or 1.07% to 27,437.94, while the CNX Nifty lost 93.05 points or 1.11% to 8,305.25.

The BSE Sensex touched a high and a low of 27829.11 and 27344.70, respectively. The BSE Mid cap index was down by 1.62%, while Small cap index down by 2.66%.

The top gainers on the Sensex were ONGC up by 2.60%, Maruti Suzuki up by 1.92%, TCS up by 1.63%, ITC up by 1.43% and Tata Motors up by 0.72%. On the flip side, Infosys down by 5.95%, Cipla down by 3.89%, Sesa Sterlite down by 3.16%, Hindalco down by 2.78% and Larsen & Toubro down by 2.63% were the top losers.

The lone gaining sectoral index on the BSE was FMCG up by 0.01% while, Realty down by 3.85%, Consumer Durables down by 3.18%, IT down by 2.78%, Capital Goods down by 2.57% and TECK down by 2.33% were the losing indices on BSE.

Meanwhile, the Gem & Jewellery Export Promotion Council (GJEPC) in its release on the annual performance of the Indian gem & jewellery sector has said that Gem and jewellery exports fell by a marginal 0.62% in financial year 2014-15, due to a 5.5% fall in outbound shipments of cut and polished diamonds, but the gold jewellery segment rebounded with a 17.8% rise. The export was $39.9 billion in 2014-15, as compared to $40.15 bn the previous year. However, in rupee terms, export rose marginally to Rs 243,885.8 crore from Rs 242,837 crore a year before.

The overall gross imports of Gems & Jewellery at $ 31470.78 million up by 1.29% (2.65% in Rs. term) as compared to $ 31071.18 million. In rupee terms it was worth Rs 192074.99 crores showing a growth of 2.65% compared to Rs. 187109.89 crores for the same period previous year.

The overall gross export of Cut & Polished diamonds stood at $ 23160.18 million, showing a decline of 5.46% as compared to $ 24498.48 million. In rupee terms the exports were worth Rs. 141514.28 crores, down by 4.50% to Rs 148185.20 crores for the same period of previous year, mainly due to decline in volume terms of the gross Import of rough diamonds. The gross imports of Cut & Polished diamonds stood at $ 6943.07 million up by 6.15% as compared to $ 6540.77 million for the same period of previous year. In rupee terms the growth was of 7.11% to Rs 42410.19 crores from Rs 39585.97 crores in the last fiscal.

The Indian gem & jewellery exports which forms nearly 13 per cent of India’s overall merchandise export made a contribution of $ 39898.81 million to India's coffers in terms of foreign exchange earnings. The downturn in China, unrest in West Asia, slowdown in Europe and the depreciation of the Russian ruble affected exports.

The CNX Nifty touched a high and low of 8,413.30 and 8,273.35 respectively.

The top gainers on Nifty were NMDC up by 3.45%, ONGC up by 3.07%, Cairn India up by 2.62%, TCS up by 2.13% and Lupin up by 2.10%. On the flip side, Infosys down by 6.08%, Cipla down by 3.79%, Bank of Baroda down by 3.32%, BPCL down by 3.28% and Yes Bank down by 3.03% were the top losers.

European Markets were trading in the green; Germany's DAX gained 0.70%, France's CAC surged 0.58% and UK's FTSE 100 was up by 0.47%.

The Asian markets made a mixed closing on Friday, though some of the indices extended their weekly gains, some others closed with cuts of around half a percent. Japanese and Chinese market both suffered profit-taking and took a breather, following the recent strong gains. Although, the Bank of Japan said that an index measuring producer prices in Japan were up 3.2 percent on year in March, standing at 103.0. For the first quarter of 2015, producer prices were up 3.3 percent on year, slowing from 3.5 percent in the previous three months. On the same time, the Chinese labor ministry reported that the urban unemployment rate ticked down to 4.05 percent at the end of March from 4.1 percent at the end of 2014. In other markets, Hang Seng, KLSE Composite and Straits Times moved higher, while the Taiwanese market surged by over a percent.