Mumbai: Bears remained powerful for the whole session on Thursday on bleak guidance from Infosys for FY12. However, it managed to trim some looses in late trade on better than expected Spain's bond auction. Meanwhile, though industrial output improved significantly in November, it proved to an non-event for the market.
The Sensex dropped 138.35 points, to close at 16,037.51 and the Nifty fell 29.70 points to 4,831.25.
Shares of technology bellwether Infosys was hammered out of shape on Thursday, falling 8.4 per cent. The second largest software services exporter reported a growth of 24.5 per cent in Q3 net profit of Rs 2,372 crore as against previous quarter, which was better than analysts' expectations. The street was disappointed with its dollar revenue guidance for FY12 and flattish guidance for the fourth quarter.
The company expects FY12 revenue to grow at 16.4 per cent as against earlier guidance of 17.1-19.1 per cent. Its CEO and MD SD Shibulal said the global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry.
Among technology stocks, TCS tanked 3.9 per cent and Wipro was down 2.6 per cent.
The industrial output (IIP) for November showed a good growth, improving from a negative 4.7 per cent (revised upwards from -5.1%) in October to 5.9 per cent in November. The growth mainly came in from manufacturing, consumer durables and consumer non-durables. Manufacturing output, which constitutes about 76 per cent of the industrial production, grew an annual 6.6 per cent versus negative 6 per cent in a year ago period.
Capital Goods (grew at negative 4.6 per cent versus negative 25.5 per cent YoY) and mining (negative 4.4 per cent versus negative 7.2 per cent YoY) sectors remain the laggards. "We do not expect capital goods sector to have a great outlook for the next two-three years," Venugopal Dhoot of Videocon told CNBC-TV18.
Meanwhile, this near 6 per cent growth in November may have again shroud hopes of a rate cut, including the much-expected CRR cut.
"I think the RBI will take comfort from the industrial output number as it shows growth is shaky but not negative. It also allows the central bank to continue to focus on inflation," said Madan Sabnavis, chief economist with CARE Ratings, who does not expect any monetary easing before the end of March.
Index heavyweights Reliance Industries and ONGC were down 1.44 per cent and 0.56 per cent, respectively. Capital goods majors L&T and BHEL fell 0.9-1.25 per cent.
However, SBI topped the buying list, rising 2 per cent. HDFC post its third quarter numbers and HDFC Bank were up 0.9 per cent each.
Metal stocks like Tata Steel, Coal India, Hindalco and Sterlite Industries moved up 1-1.8 per cent.
European markets extended gains post Spanish bond auction. Spain sold 9.98 billion euros as against estimate of 5 billion euros. Germany's DAX was up 1.3 per cent; France's CAC gained 0.9 per cent and Britain's FTSE went up 0.3 per cent. Even the Dow Jones futures rose 37 points.
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