Sensex Collapsed to 257 Points on Infosys Forecast

Mumbai: A benchmark index of Indian equities markets slumped 1.5 percent after Infosys announced disappointing earnings for the June quarter that led to a sell-off in other software exporters like Wipro and Tata Consultancy Services amid weak global cues.

Infosys slumped 8.15 percent to 2,265.25. The share price of the IT bellwether dipped to a low of 2,216.05 intra-day. Wipro plunged 3.98 percent to 359.30.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened sharply down at 17,297.06 points, ended the day at 17,232.55 points, down 1.47 percent or 256.59 points from its previous day close at 17,489.14 points.

The benchmark Sensex tumbled to a low of 17,181.17 points intra-day.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange plunged 1.34 percent or 71.05 points to close at 5,235.25 points.

Investors dumped IT stocks after the country's second largest software exporter Infosys reported disappointing earnings for the first quarter of the current financial year and cut its sales forecast, signalling tough time ahead for the software exporters.

Infosys lowered its revenue forecast in dollar terms for the current financial year to $7.34 billion from its earlier estimate of $7.6 billion. Infosys is the first IT company to disclose quarterly results.

The BSE IT index slumped 5.11 percent to 5,384.39 points. There was heavy selling pressure in all major IT stocks. The country's largest software exporter Tata Consultancy Services fell 1.80 percent at 1,236.10 and the third largest IT firm Wipro fell 3.98 percent at 359.30.

Disappointing earnings of Infosys offset the impact that the better-than-expected industrial output could have on the market. India's industrial output grew by 2.4 percent in May as against 0.9 percent contraction in the previous month, led by rebound in manufacturing and electricity production.

Other major Sensex losers were Bharti Airtel, down 3.04 percent at 306.25; Mahindra & Mahindra, down 2.09 percent at 717.60; Tata Motors, down 1.97 percent at 236.65 and L&T, down 1.75 percent at 1,409.70.

Only nine of the 30 Sensex scrips closed in the positive. ONGC advanced 1.42 percent at 282.15, while Hero MotoCorp was up 0.88 percent at 2,058.55. Gail India moved 0.63 percent up at 360.15 and so was Tata Power, up 0.60 percent at 100.80.

Most global markets were also in the red. The Japan's Nikkei slumped 1.48 percent at 8,720.01 points. Hong Kong's Hang Seng fell 2.03 percent at 19,025.11 points. However, China's Shanghai Composite index rose 0.46 percent at 2,185.49 points.

European markets were trading in the red. Britain's FTSE 100 index was down 1.30 percent, French CAC 40 index was down 0.71 percent and German DAX was ruling 1.20 percent lower at around noon trade.