Sensex, Nifty fall as Infosys outlook disappoints investors
Infosys, the country’s second-biggest software services exporter, said it expected revenue for the year 2017-18 to grow 6.5% to 8.5% in constant currency terms, below market expectations, while saying it would return up to $2 billion to shareholders.business Updated: Apr 13, 2017 16:01 IST
Indian shares fell on Thursday, dragged by technology stocks, after Infosys Ltd’s revenue outlook and plan to return cash to shareholders fell short of expectations, raising concerns at the start of the earnings reporting season.
Infosys, the country’s second-biggest software services exporter, said it expected revenue for the year 2017-18 to grow 6.5% to 8.5% in constant currency terms, below market expectations, while saying it would return up to $2 billion to shareholders.
The announcements sent Infosys stock down as much as 2.9% to its lowest since Feb. 9, offsetting early gains on its slightly higher-than-expected consolidated net profit, and cast a shadow over future earnings results.
The broader NSE Nifty hit a record high last week and is up about 12% this year, with a lot of those gains reflecting bets that corporate earnings would recover this year.
However, concerns persist as geopolitical worries have grown after the United States launched cruise missiles against an air base in Syria last week and on fears of a new weapons test by North Korea.
“There is wariness about earnings because valuations are so stretched,” said Sunil Sharma, chief investment officer, Sanctum Wealth Management.
“Markets have run up and people are looking at booking profits.”
The Nifty was down 0.18% at 9,186.60 as of 0524 GMT, poised for a weekly loss of about 0.14%.
The benchmark BSE Sensex was 0.17% lower at 29,593.28, headed for a 0.4% weekly fall.
Indian shares are headed for a fall this week, reversing gains of about 0.3% made last week.
The Nifty IT index fell as much as 1.75% to its lowest in over two months. The index has fallen about 0.7% this year, up to Wednesday’s close.
However, financial stocks continued to rise with the Nifty PSU Bank index trading 1.1% higher. Up to Wednesday’s close, the index has risen nearly 18.4%.