Setback in Infosys weighs on key indices

Key benchmark indices edged lower in choppy trade, with IT stocks leading the decline after IT bellwether Infosys issued a muted outlook for Q4 March 2012 at the time of reporting Q3 December 2011 results before trading hours today, 12 January 2012. Nonetheless, the market staged intraday recovery with the barometer index, BSE Sensex, regaining the psychological 16,000 level after falling below that level in intraday trade. Gains in European stocks, stronger-than-expected growth in industrial production in November 2011 and food inflation remaining in negative terrain for the second week in a row, aided intraday recovery on the domestic bourses. The Sensex lost 138.35 points or 0.86%, up about 75 points from the day's low and off close to 140 points from the day's high. IT bellwether Infosys tumbled more than 8%.



The Sensex has jumped 582.59 points or 3.76% so far in this month. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 3,773.63 points or 19.04%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 901.65 points or 5.95%.

Coming back to today's trade, housing finance major HDFC edged higher after reporting 18.61% growth in profit before sale of investment and before tax in Q3 December 2011. Interest rate sensitive banking stocks rose on expectations that the Reserve Bank of India will start cutting interest rates in the coming months to prop up slowing economy. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade. Metal stocks extended recent gains triggered by continued anticipation of further monetary policy easing from China. Power stocks also bucked a weak market. The market breadth was positive. BSE Mid-Cap Small-Cap indices were in green.

IT stocks led initial slide as Infosys cut its earnings and revenue growth guidance in dollar terms for the year ending March 2012 (FY 2012) after reporting Q3 results before trading hours. The market weakened once again after recovering from initial slide to hit fresh intraday high in morning trade. High volatility was witnessed in mid-morning trade as key benchmark indices once again slipped into the red after recovering sharply to move into positive terrain to hit fresh intraday high in mid-morning trade. The market tumbled to hit fresh intraday low in early afternoon trade. Weakness prevailed in afternoon trade. The market trimmed losses in mid-afternoon trade. The market trimmed losses after weakening once again in late trade.