Hit by over 21 per cent plunge in Infosys shares on disappointing earnings, the BSE benchmark Sensex on Friday tumbled by nearly 300 points to end at 18,242.56 despite better-than-expected industrial production as well as consumer price inflation data.
The Sensex, which had gained 316 points in last two sessions, dropped by 299.64 points, or 1.62 per cent to 18,242.56. Similarly, the broad-based National Stock Exchange index Nifty lost 65.45 points, or 1.17 per cent to 5,528.55.
The second biggest software exporter, Infosys plunged by 21.33 per cent to Rs 2,295.45, recording its biggest single day fall since April 2003, after lower-than-expected revenue outlook for fiscal 2013-14 and disappointing Q4 earnings.
“The main reason for the decline in benchmark indices was the big fall in share price of Infosys,” said Nagji K Rita, Chairman & MD, Inventure Growth and Securities.
Markets ignored sentimentally positive macroeconomic data like February IIP at 0.6 per cent as against street expectations of marginal decline and Consumer Price Index (CPI)-based inflation declining to 10.39 per cent in March, said brokers.
After the steep fall in Infosys, which alone dragged the Sensex deep into negative terrain, other software exporting companies such as Tata Consultancy Services, HCL Technologies, Wipro and Tech Mahindra also declined.
In 30-share Sensex pack, 13 stocks declined, while 16 stocks gained led by ITC, SBI and RIL.
Sectorally, the IT sector index suffered the most by falling 11.09 per cent to 6,040.48, followed by tech index by 1.87 per cent to 3,506.81. Capital goods index fell by 0.69 per cent to 8,940.19 and consumer durable index by 0.61 per cent to 6,958.57.
Trading sentiment further dampened on a weakening trend in overseas markets before a report that may show US retail sales stagnated.
Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan fell by 0.06 per cent to 1.31 per cent. European markets were also trading lower on profit-booking after a four-day winning streak.
However gains in FMCG, banking and refinery stocks like ITC, HUL, SBI, HDFC Bank, ICICI Bank, RIL and ONGC limited the sensex fall to a major extent, otherwise the downslide would have been much more pronounced.
Retail inflation declined to 10.39 per cent in March from 10.91 per cent in February while factory output, as measured by the Index of Industrial Production, has slipped to 0.6 per cent in February from 4.3 per cent in the same period last year.
Other major losers from the Sensex pack were Coal India (1.78 per cent), Larsen & Toubro (1.31 per cent), Maruti Suzuki (1.27 per cent), Mahindra & Mahindra (1 per cent) and Tata Motors (0.99 per cent).
However, ITC rose by 2.75 per cent followed by SBI 1.98 per cent and Tata Power 1.17 per cent.
Among the sectorial indices, S&P BSE-IT dropped the most by 11.09 per cent followed by S&P BSE-Teck 8.87 per cent and S&P BSE-CG 0.69 per cent.
However, the S&P BSE-FMCG firmed up by 1.95 per cent, S&P BSE-Power 1.02 per cent and S&P BSE-Bankex 0.96 per cent.
The total market breadth turned negative as 1,261 stocks finished in red while 1,042 stocks closed in green and 141 stocks ruled steady. The total turnover was higher at Rs 1,937.63 crore from Rs 1,696.44 crore yesterday