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Markets Ignore Infosys Numbers

Though rising oil prices and disappointing first quarter results of Infosys troubled equity investors over the week ended July 15, 2005, markets staged a comeback on Friday

Even as poor numbers declared by software major Infosys troubled investors, equity markets continued their upward march in the week ended July 15, 2005. While the Sensex closed 59 points up at 7,272, the Nifty added 16 points over the week to close at 2,213 mark.

The equity markets had a favorable start on Monday. The 30-stock BSE Sensex reached another milestone--after touching an intra-day high of 7,320 points, it closed up 95 points at 7,307. Midcap stocks too were in action, as the CNX Midcap 200 closed 1.46 per cent up. The rally was primarily led by banking stocks with support from auto, cement and select index heavyweights.

After a volatile session, equity markets ended flat on Tuesday. Poor numbers declared by software major Infosys held the market. Profit booking in some technology scrips also added to the volatility, as the 30-stock BSE Sensex closed three points down at 7,304. Infosys lost over 4 per cent on Tuesday, followed by TCS and HDFC. Metal, banking, auto, engineering, fertilisers, FMCG, oil PSUs, technology, and pharma stocks witnessed selling pressure.

Equity markets slipped in the red on Wednesday. While the 30-scrip BSE Sensex shed 56 points to fall below the 7,300 mark at 7,248 points, the Nifty too fell 17 points to end the day at 2,204 mark. The mood was cautious on the back of rising global crude prices coupled with disappointing first quarter results from technology major Infosys. Heavy selling and the concerns over the forthcoming results dragged the markets down. Consumer durables and capital goods stocks were the major gainers while steel, technology, FMCG, oil and gas stocks lost on Wednesday.

The markets extended their losing streak even on Thursday. The 30-scrip BSE Sensex lost 60 points before ending at 7,188 points, while Nifty shed 19 points, ending at 2,185. The quarterly results declared by HDFC Bank failed to impress the markets as the stock fell sharply after the result announcement, before recovering later to end flat. Tech majors TCS and Infosys fell in excess of 3 per cent. The weakness prevailed across all the sectors, though select pharma stocks like Ranbaxy and Cipla surged. RIL and ITC were among others to end in green, gaining 1.8 and 2.1 per cent respectively.

Friday brought the cheers back. Led by index heavyweights, including Reliance and Infosys, the 30-stock BSE Sensex surged 84 points to end the day at 7,272 points. The Nifty too gained 27 points to close at 2,213 mark. Sustained buying interest in the auto, technology banking and energy stocks contributed to Friday's rise. Technology counters, which were depressed after the poor numbers announced by Infosys, bounced back on expectations of healthy quarterly results from TCS.

Among the 30 Sensex constituents, 10 stocks lost over the week. The pack of losers was led by ITC which shed over 5.91 per cent, followed by 4.87 per cent slide in the TISCO.

Among the major gainers, ACC surged a whopping 8.34 per cent after the cement major announced strong quarterly numbers on Wednesday. ACC posted a 72 per cent jump in the net profits to Rs 139 crore, while the total income grew by 25 per cent to Rs 1,170 crore during the second quarter of 2005.

Among the sectoral indices, the BSE IT Index lost 4.19 per cent after Infosys declared poor numbers. All other major indices ended in green. The BSE FMCG Index gained 1.93 per cent, while the BSE Healthcare rose 1.40 per cent.

The combined daily average turnover on both exchanges went up by 11.87 per cent to Rs 9,759 crore.

Foreign institutional investors continued their buying spree and pumped in Rs 1,592 crore in the Indian equities. Mutual funds, though, sold stocks worth over Rs 335 crore.

Outlook

Everything seems to be in place for the Indian equity markets. Equity investors have ignored the Infosys numbers and moved ahead. In days to come, the third quarter's numbers would influence the market movements. Continued support from the FIIs is encouraging.