Markets make gap-down opening; Infosys plunges over 7%

Indian equity benchmarks halted bull run on Friday with gap-down opening amid mixed global cues. Weak Q1FY24 results by Infosys pulled the benchmark indices down after the IT bellwether cut its FY24 outlook to 1-3.5 per cent in constant currency from 4-7 per cent it had guided in the previous quarter. Markets are trading deeply in red with cut of over half a percent each in early deals as investors opted to book profit after recent rally. Traders were concerned as latest payroll data released by the Employees’ Provident Fund Organisation (EPFO) showed that formal job creation slowed in May after recovering slightly at the turn of the fiscal year in the previous month. The number of new monthly subscribers under the EPF declined by close to 1 per cent to 883,176 in May from 891,974 in April. 

On the global front, Asian markets are trading mixed ahead to next week's US Fed monetary policy meeting, where the Fed is widely expected to raise interest rates by another quarter point. Besides, overall consumer prices in Japan were up 3.3 percent on year in June. Back home, provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) have bought shares worth Rs 3,370.90 crore on July 20. In stock specific development, Ultratech Cement and Reliance Industries declined ahead of their earnings results due later in the day. However, Union Bank of India rallied after its first-quarter profit more than doubled.

The BSE Sensex is currently trading at 67032.05, down by 539.85 points or 0.80% after trading in a range of 66822.15 and 67190.52. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.09%, while Small cap index up was by 0.01%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.29%, Industrials up by 0.90%, PSU up by 0.52%, Power up by 0.33% and Utilities up by 0.29%, while IT down by 3.53%, TECK down by 3.26%, Consumer Durables down by 0.52%, Telecom down by 0.47%, Metal down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.66%, SBI up by 0.74%, Power Grid up by 0.45%, Maruti Suzuki up by 0.40% and Nestle up by 0.38%. On the flip side, Infosys down by 7.14%, Tech Mahindra down by 3.73%, HCL Technologies down by 2.06%, Wipro down by 1.81% and Hindustan Unilever down by 1.58% were the top losers.

Meanwhile, Germany’s Vice Chancellor and Minister of Economic Affairs and Climate Action Robert Habeck has said India and Germany want to further strengthen bilateral cooperation and increase investments and collaboration among companies. Habeck also said China is Germany’s biggest trading partner and a lot of German and European companies have invested in that country. 

He added ‘It is a huge market and this goes the same for India and for the US for example. On the other hand, we see that being dependent on only one market could be a risk and even more so if we see that economic issues are not politically neutral, that interests are interwoven in the economic relations’. He further said ‘we can’t decouple from China’ but de-risking and diversification is of highest importance. Diversification, he said means that other partnerships, the Indo-German partnership and other ones as well, become more and more important. 

He said ‘My understanding also from the talks ahead with the Indian partners is, that goes the same for India. So there is a mutual interest from the German side and the Indian side to strengthen our cooperation and bringing more companies together, bringing more investments, creating a common trade sphere also as an answer that we are not becoming too dependent on only one country and from the German side that is also China’.

The CNX Nifty is currently trading at 19842.20, down by 136.95 points or 0.69% after trading in a range of 19776.00 and 19887.40. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.72%, Divi's Lab up by 1.00%, ONGC up by 0.81%, Britannia Industries up by 0.79% and Adani Enterprises up by 0.77%. On the flip side, Infosys down by 7.14%, Tech Mahindra down by 3.77%, HCL Technologies down by 2.04%, Wipro down by 1.88% and TCS down by 1.67% were the top losers.

Asian markets are trading mixed; Hang Seng advanced 136.83 points or 0.72% to 19,064.85, Shanghai Composite strengthened 1.42 points or 0.04% to 3,170.94, Straits Times rose 1 points or 0.03% to 3,275.38 and KOSPI was up by 0.72 points or 0.03% to 2,600.95. On the other hand, Nikkei 225 slipped 109.77 points or 0.34% to 32,380.75, Taiwan Weighted lost 167.06 points or 0.98% to 16,997.83 and Jakarta Composite was down by 13.68 points or 0.2% to 6,850.51.