BSE Sensex fell on Thursday, dragged by technology stocks, after Infosys Ltd’s revenue outlook and plan to return cash to shareholders fell short of expectations, raising concerns at the start of the earnings reporting season. Infosys, the country’s second-biggest software services exporter, said it expected revenue for the year 2017-18 to grow 6.5% to 8.5% in constant currency terms, below market expectations, while saying it would return up to $2 billion to shareholders.
The announcements sent Infosys stock down as much as 2.9% to its lowest since 9 February, offsetting early gains on its slightly higher-than-expected consolidated net profit, and cast a shadow over future earnings results. The broader NSE Nifty hit a record high last week and is up about 12% this year, with a lot of those gains reflecting bets that corporate earnings would recover this year.
However, concerns persist as geopolitical worries have grown after the US attack on Syria last week and on fears of a new weapons test by North Korea. “There is wariness about earnings because valuations are so stretched,” said Sunil Sharma, chief investment officer, Sanctum Wealth Management. “Markets have run up and people are looking at booking profits.”
Indian shares are headed for a fall this week, reversing gains of about 0.3% made last week. The Nifty IT index fell as much as 1.75% to its lowest in over two months. The index has fallen about 0.7% this year, up to Wednesday’s close. However, financial stocks continued to rise with the Nifty PSU Bank index trading 1.1% higher. Up to Wednesday’s close, the index has risen nearly 18.4%.
2.06pm: BSE Sensex trades lower by 107 points, or 0.36%, to 29,536, while the Nifty 50 falls 25 points, or 0.28%, to 9,178.
1.22pm: BSE Sensex trades lower by 118 points, or 0.40%, to 29,525, while the Nifty 50 falls 30 points, or 0.32%, to 9,174.
1.20pm: Infosys Ltd shares fall as much as 4% to hit two month low of Rs927 a share. So far this year it fell 7.4%. The company reported weaker then expected constant currency guidance to 6.5-8.5% from 7.2-9.4% estimates according to 15 analysts polled by Bloomberg.
1.00pm: Tata Consultancy Services Ltd shares fall 2.3% to Rs 2339.25 ahead of its March quarter earnings on 18 April. According to 30 Bloomberg analyst estimates, the company may post net profit of Rs 66.55 billion while revenues will be at Rs 298.93 billion.
12.05pm: BSE Sensex trades lower by 53 points, or 0.18%, to 29,591, while the Nifty 50 falls 34 points, or 0.36%, to 9,203.
10.33am: BSE Sensex trades lower by 49 points, or 0.17%, to 29,595, while the Nifty 50 falls 16 points, or 0.18%, to 9,187.
9.35am: BSE Sensex trades lower by 90 points, or 0.30%, to 29,553, while the Nifty 50 falls 25 points, or 0.28%, to 9,178.
9.32am: Infosys Ltd fell 2% to Rs952.10 after the company reported weaker then expected constant currency guidance to 6.5-8.5% from 7.2-9.4% estimates according to 15 analysts polled by Bloomberg.
9.30am: Reliance Power Ltd fell 0.2% to Rs47.90 ahead of its March quarter earnings. According to Bloomberg analysts, the company may post a net profit of Rs281.50 crore, while net sales will be at Rs2543.70 crore.
9.28am: Metal stocks were trading lower. Vedanta Ltd fell 2.4%, Hindalco Industries Ltd 2%, Jindal Steel & Power Ltd 1.7%, Steel Authority of India 1.4%, JSW Steel Ltd 1.5% and Tata Steel Ltd 1.1%.
9.25am: Adani Ports and Special Economic Zone Ltd fell 2% to Rs320.80 after broking firm Macquarie downgraded the stock to “neutral” from “outperform”.
9.20am: Arshiya Ltd rose 3% to Rs80 after the company said Singapore’s Ascendas to buy six warehouses of the company for gross consideration of Rs534 crore.
9.15am: The rupee opened at 64.50 a dollar. At 9.15am, the home currency was trading at 64.37, up 0.46% from its Wednesday’s close of 64.67.
9.10am: The 10-year bond yield was trading at 6.779% compared to its previous close of 6.782%. Bond yields and prices move in opposite directions.
9.00am: Asian currencies were trading higher. South Korean won was up 0.93%, Taiwan dollar 0.92%, Philippines peso 0.33%, China renminbi 0.2%, Thai baht 0.2%, China offshore 0.15%, Indonesian rupiah 0.08% and Malaysian ringgit 0.07%.
With inputs from Reuters
