Infy’s bleak outlook snaps 6-day market rally

MUMBAI: Benchmark stock indices Sensex and Nifty tumbled over 1 per cent on Friday, snapping their six-day record-breaking run as Infosys tanked over 8 per cent after it slashed the FY24 growth outlook.

The 30-share BSE Sensex tanked 887.64 points or 1.31 per cent — its biggest single-day slide in over four months — to settle at 66,684.26. During the day, it plummeted 1,038.16 points or 1.53 per cent to 66,533.74. The NSE Nifty fell by 234.15 points or 1.17 per cent to end at 19,745, cutting short its six-day winning run. As many as 36 Nifty shares closed in negative while 14 advanced.

The indices have closed at record- high levels in the past six trading sessions. While Sensex rallied 2,178 points or 2.86 per cent in the past six sessions to Thursday, Nifty spurted by 594 points or 3.84 per cent, scaling new highs. From the Sensex pack, Infosys tanked over 8 per cent after the company reported a lower-than-expected 11 per cent rise in net profit for the June quarter and delivered a shocker as it slashed its FY24 growth outlook to 1-3.5 per cent on delayed decision-making by clients amid global macro uncertainties.

“The weak guidance from Infosys cast a shadow over the outlook of the Indian IT sector, causing a delay in Nifty’s pursuit of the 20,000 mark. While the heavyweights surrendered to the bears, the small caps demonstrated resilience,” Vinod Nair, Head of Research at Geojit Financial Services said.

Global markets presented a mixed picture, with the US market struggling due to weak earnings, while UK retail sales exceeded expectations with a 0.7 per cent MoM growth, he added.

A decline in shares of market blue-chip firms Reliance Industries and Tata Consultancy Services also added to the bearish trend in equities. Hindustan Unilever, HCL Technologies, Wipro, and Tech Mahindra were the other major laggards. On the other hand, Larsen & Toubro rose the most by 3.88 per cent after it bagged an order of worth over Rs 7,000 crore from the bullet train project. NTPC, State Bank of India, Kotak Mahindra Bank, Tata Motors, ICICI Bank, Sun Pharma, Maruti and Bharti Airtel were also among the gainers.

BSE Midcap dropped by 0.26 per cent to 29,547.28 while BSE Smallcap index edged up 0.13 per cent to 34,146.66 points. Among sectoral indices, BSE IT fell the most by 4.40 per cent, followed by Teck which fell 3.91 per cent, consumer durables (1.09 per cent) and FMCG (0.89 per cent). Capital Goods climbed 1.69 per cent, industrials jumped 1.33 per cent and telecommunication (0.35 per cent).

“The decline was widespread wherein the IT pack faced the maximum heat, followed by FMCG and energy majors. Meanwhile, the broader indices traded mixed, capping damage to the market breadth,” Ajit Mishra, SVP - Technical Research, Religare Broking Ltd said.