Stock markets tumble as Infy tanks over 21% on growth concerns
The BSE benchmark index Sensex tanked nearly 300 points as software major Infosys crashed by over 21 per cent due to disappointing results and a weak revenue forecast for this fiscal ignoring fall in retail inflation and better-than-expected industrial growth.
The 30-share index closed at 18,242.56 points, down by 299.64 points or 1.62 per cent -- the largest fall since February 26, 2013, when it plunged by 316.55 points or 1.64 per cent. Among 30 Sensex stocks, 16 closed in the red, wiping out most of previous two days' gain of 1.73 per cent.
Infosys, the country's second largest software exporter, tumbled 21.33 per cent on BSE after reported a 3.3 per cent increase in net profit for the January-March quarter and forecast a revenue growth of 6-10 per cent for this fiscal, lower than IT industry body Nasscom's estimate.
"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.
"Infosys fell over 20 per cent, its biggest fall since 2003, after delivering disappointing Q4 numbers and FY14 dollar revenue guidance of 6-10 per cent, which is below Nasscom estimates," Sanjeev Zarbade, Vice President (Private Client Group Research), Kotak Securities said.
The BSE barometer commenced sharply lower with a downside gap of over 265 points and remained in negative terrain throughout the day.
The 50-issue Nifty of the National Stock Exchange also slumped by 65.45 points, or 1.17 per cent, to 5,528.55.
Hit by growth concerns fanned by weak Infosys guidance, other IT companies too suffered losses. TCS fell by 1.63 per cent and Wipro by 4.72 per cent on BSE, draging the sectoral BSE IT index down sharply by 11.09 per cent.
The decline was in contrast to fall in retail inflation in March and factory output growth of 0.6 per cent in February.
"IIP for the month of February came at 0.6 per cent Y-o-Y as against the street expectation of marginal decline," Zarbade said.