Growth guidance sends markets into tailspin

Key benchmark indices, on Friday, declined to hit lowest level in two weeks as weak Q4 earnings by IT bellwether Infosys and subdued European stocks dampened sentiment in D-Street apart from intraday volatility being high.

Also, expectations of rising India’s trade deficit in FY12 added fuel to the fire.

The IT bellwether Infosys tumbled nearly 13 per cent on disappointing Q4 results, which impacted other IT stocks as well falling across the board. 
Though Infosys met street expectations of Q4 net profit at Rs 2,316 crore but its guidance for fiscal 2013 was disappointing. Among other software majors, TCS was down nearly 6 per cent and Wipro ended down 4.2 per cent.

Index heavyweight Reliance Industries (RIL) edged higher in volatile trade, while another index heavyweight L&T reversed initial gains.  Other Sensex losers like ICICI Bank was down 1.7 per cent.  Realty stocks also reversed initial gains but interest sensitive bank stocks were mostly lower. Pharma stocks edged higher on defensive buying in weak market.

Even as the market stayed moderately higher in the first half of trade this day with support from all excepting technology but the news of sharp rise in borrowings by Spain from ECB in March and China’s slowest GDP growth since the first quarter of 2009 dampened the sentiment quite badly in the second half of trade. It trimmed losses after slumping to hit lowest level in two weeks in mid-afternoon trade.

The popular Sensex at BSE was down 238.11 points or 1.37 per cent to 17,094.51, its lowest closing level since March 29, 2012. The index rose 65.60 points at the day's high in mid-morning trade and fell 305.32 points at the day's low in mid-afternoon trade.

The 50-unit S&P CNX Nifty was down 69.40 points or 1.32 per cent to settle at 5,207.45, its lowest closing level since March 29, 2012. The Nifty hit a high of 5,306.75 and a low of 5,185.40 in intraday trade.