Friday the 13th spooks Sensex...Infosys plunges

It was a Freaky Friday for the Indian market as the equity benchmarks ended the week on a negative note amid disappointing quarterly earning by the IT bellwether Infosys and below par revenue guidance.

Infosys reported Q4 FY12 consolidated net profit of Rs. 23.16bn versus Rs. 23.72bn in the preceding quarter. Infosys' consolidated revenues for Q4 FY12 stood at Rs. 88.52bn versus Rs. 92.98bn in the quarter ended Dec. 31, 2011.

The IT pack was battered today, led by Infosys. The stock was down ~12%, while TCS, Wipro and HCL Tech too were hit hard. The IT indices on the BSE and NSE were down nearly 9%.

As if the disappointment of Infosys results was not enough, the European markets slipped amid worries about the precarious financial health of debt laden Spain and Italy.



The BSE Sensex ended at 17,094, down 238 points or ~1.4% over the previous close. It had touched a day’s low of 17,027 and a day’s high of 17,398. It opened at 17,232.

The NSE Nifty settled at 5,207, down 69 points or 1.3% over the previous close. It touched a day’s low of 5,185 and day’s high of 5,307.

The INDIA VIX on the NSE ended higher by 4.5% to close at 22.75. It hit days high of 23.16. It hit a low of 19.86.

Among the BSE sectoral indices, IT index slumped 8.8%, Teck index lost 7%, Realty index fell 1% and Banking index fell 1%. On the other hand, Pharma index gained 1% and FMCG index gained 0.6%.

The BSE Mid-Cap index fell 0.7% while the BSE Small-Cap index was down 0.6%.

Out of the 50 stocks in the Sensex, the notable losers were Infosys, TCS, Wipro, Hindalco, Jindal Steel and ICICI Bank.

Among the major gainers included Sun Pharma, Coal India, Hero Motocorp, Tata Motors and Reliance Industries.

The market breadth was negative, with 1567 stocks declining and 1236 stocks advancing.

Technically, on the weekly candle stick chart the Nifty confirmed a trend reversal with formation of ‘evening star’ pattern. The resistance of 5300 was attempted but renewed selling pressure forced Nifty to close near the weekly low. On the daily chart support of bearish triangle is placed at 5180 and any opening below same should aggravate selling pressure and hence would advise extreme caution on markets.

"If one takes out the weakness in Infosys and other IT stocks, the Indian market was doing quite okay till the late selloff spooked the investors. A sharp downward revision in Janaury IIP data and lower-than-estimated February industrial production have raised the odds of a repo rate cut at the April 17 policy meeting of the RBI. Whether the central bank obliges the markets only time will tell. Also, one doesn't really know whether one rate cut by the RBI will be enough to revive the Indian economy. The Government needs to take urgent steps to kick-start the comatose investment cycle," says Amar Ambani, Head of Research, IIFL.

Lower-than-expected first-quarter GDP growth data from China sent European stocks lower today despite the fact that most of the Asian counterparts overlooked the weak China GDP data.

Spain's IBEX 35 index was down ~2% while Italy's FTSE MIB index was down 1.4% and the CAC in France lost ~1%.

Spanish stocks and government bonds came under renewed pressure after data showed a sharp rise in borrowing by the nation's banks from the European Central Bank in March.

Asian markets pared gains but closed firmly higher after weaker-than-expected China GDP data sparked hope of more policy measures from local authorities.

China's Shanghai Composite index was up by 0.1%. The Hang Seng climbed 1.6% and Japan’s Nikkei rose 1.1%.

Australia’s S&P/ASX 200 index advanced 0.8% while South Korea’s Kospi added 0.7%.

China’s GDP for the first quarter expanded at the slowest pace in 11 quarters. The world’s second largest economy grew 8.1% in the period vs. analysts expectations of 8.3% growth.

Asian markets closed with strong gains amid hope of further stimulus from the Federal Reserve and expectations of a soft landing in China. The upbeat trend across Asian markets was also underpinned by a failed rocket launch by North Korea.

Gold futures retreated in electronic trading, part of a broader sell-off across commodity market while the dollar index advanced. The euro, pound sterling and the Australian dollar all declined.

Oil dropped for the first time in three days, erasing a weekly gain, after China’s economy grew at the slowest pace in 11 quarters and Saudi Arabia’s oil minister said the producer is determined to see lower prices.