Sensex dips 310 pts on weak IIP data, Infosys outlook

Software exporter Infosys, which carries second heaviest weight on the Sensex, tumbled 4.27 per cent and was the top loser after it posted first quarter results and gave a bleak outlook -- contributing about 80 points to the fall.

The Bombay Stock Exchange 30-scrip index, Sensex, which had lost 356 points in last two trading sessions, resumed with a sharp downside gap at 18,534.11. It fell further to a low of 18,326.42 before ending the day at 18,411.62 -- down 309.77 points or 1.65 per cent -- a level last seen on June 27,

Similarly, the broad-based National Stock Exchange index Nifty fell 89.95 points to 5,526.15, after dipping below 5,500 level to 5,496.95 during the session.

Infosys posted posted 15.72 per cent jump in its first quarter consolidated net profit, year-on-year, at Rs 1,722 crore. Brokers said it barely met street expectations and gave a bleak outlook on global economic environment.

"While this year is a normal year, the economic situation is still unstable. There are issues with Europe that are creating delays in decision making," said Infosys COO S D Shibulal.

Meanwhile, indicating sluggishness in the Indian economy, the industrial growth fell to 5.6 per cent in May, from 8.5 per cent in the same month last year due to poor performance of the manufacturing and mining sectors.

Globally, Asian markets closed sharply lower, while European stocks displayed a distinctly weak trend in afternoon trade after a steep fall on the Wall Street yesterday on concerns that the euro-zone debt crisis may extend to other countries.

"Sensex shed more than 300 points due to lower than than expected Infosys' first quarter earnings and disappointing industrial output data," said CNI Research Head Kishor Ostwal.

Geojit Bnp Paribas Research Head Alex Mathews said, "Subdued global cues (on account of European debt crisis and the recent weak US job data), lower than expected IIP figure, along with the disappointing Infosys result dragged the market today."

Besides Infosys, other heavyweights like L&T, HDFC, HDFC Bank, Tata Motor, Tata Steel, M&M, SBI, RIL and ICICI Bank fell, contributing to the downslide.

Selling was so strong that all the 13 sectoral indices ended with losses of between 2.74 per cent and 0.32 per cent, with IT, Realty, Teck, Auto, Consumer Durables and Capital Goods indices leading the fall.

BSE-IT slumped 2.74 per cent, Realty (2.68 pc), Teck (2.41 pc), Auto (2.25 pc), CD (2.19 pc) and CG (2.15 pc).

In Asia, the key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan fell between 1.28 per cent and 3.06 per cent. In Europe, the CAC was down by 2.31 per cent, the DAX by 1.98 per cent, the FTSE by 1.45 per cent.

Back home, FIIs remained net buyers and picked up shares worth Rs 432.95 crore yesterday as per provisional data.

Overall, 28 of the 30 Sensex-based stocks closed in the red while ONGC and HUL ended in the green. Other losers were DLF (3.84 pc), M&M (3.02 pc), Jindal Stl (2.99 pc), REL Infra (2.89 pc), L&T (2.88 pc), Tata Motor (2.83 pc), Tata Steel (2.70 pc), HDFC (2.40 pc), Hindalco (2.28 pc), HDFC Bank (1.72 pc), SBI (1.26 pc) and RIL (0.55 pc).

The total market breadth at BSE was sharply negative as 1,848 counters ended with falls, while 946 settled with gains. The total turnover rose to Rs 2,848.98 crore from Rs 2,249.68 crore yesterday.