It’s a bad start for the earnings season and this was reflected in the sharp fall in the markets. Both the BSE Sensex and the Nifty fell by 1.47 percent and 1.34 percent, respectively. The Sensex fell 256.59 points to 17,232.55 points while the Nifty lost 71 points to 5,235. The market breadth was negative. On the BSE, 1,630 stocks declined while 1,174 advanced.
The BSE IT index was the biggest loser with a fall of 5.11 percent. Infosys was the top loser as its scrip fell by 8 percent after it said it expects sales to grow by 5 percent to $7.34 billion, below its estimate in April of 8-10 percent growth. TCS fell by 1.8 percent post its results while Wipro fell 4 percent.
Oil marketing companies closed higher over reports that the government will raise diesel prices after Presidential elections. HPCL, IOC and BPCL rose higher admist a falling market.
Commenting on the disappointing results from Infosys, Raamdeo Agrawal, Director & Co-Founder of Motilal Oswal Financial said it is not a company specific problem, rather it is an industry wide phenomenon impacted by the circumstances in the US and Europe. Deferral of expenditure is one of the main reasons for the slowdown which has affected growth projections, feels Agrawal.
However, he is not optimistic about earnings growth and feels it could be somewhere between 5-10 percent for this fiscal, against the expected 8 percent growth.
Tomorrow is another important day for the markets as the monthly WPI data for the month of June is expected. Among earnings, HDFC Bank will announce its results as well.