The Telegraph
Since 1st March, 1999
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Triple-ton snub to terror tactics

Mumbai, July 12: The stock markets bounced back a day after Terrible Tuesday ' the resilience in part because of the spectacular results turned out by Infosys and in part because of the indomitable spirit of Mumbaikars who were out to prove that their spirit hadn’t been cowed by yesterday’s blasts.

The 30-scrip bellwether sensex surged by 315 points to 10930.09 points ' a leap of 2.9 per cent that overshadowed the apprehensions that the market would tank today.

Market watchers said the surge came as a pleasant surprise as the general consensus was that the stock market would open on a weak note. “The stock market had shown amazing strength even after the 1993 bomb blasts in Mumbai and had clawed its way back after every major attacks since then,” said a broker.

The Nifty also rose 79.75 points, or 2.5 per cent to 3195.90.

The day began with Bombay Stock Exchange managing director and chief executive officer Rajnikant Patel appealing to all its members, associates, investors, issuers, employees to be alert and not be unduly influenced by any rumours.

“The higher-than-expected results posted by Infosys boosted the confidence of the market and also the technology stocks, which led the momentum in the market,” said Manish Sonthalia, vice-president (equity strategy), Motilal Oswal Securities.

While all the sectoral indices ended in the green, BSE IT Index, which ended at 4036.16, was the largest gainer with a rise of 6.27 per cent or 238.04 points.

The market has been expecting Rs 710 crore to Rs 730 crore net profit from Infosys. However, the actual figure of Rs 790 crore surpassed all expectations. The company has also revised upwards its revenue and profit guidance for the fiscal.

The Infosys numbers and guidance caught the analysts on the wrong foot who said the gains from rupee depreciation would be outweighed by higher employee costs.

But, with the IT major beating their estimates, most of the brokerages upgraded the scrip.

Besides Infosys, Tata Consultancy Services and HCL Tech, Hindalco and Reliance were the major gainers today. The overall market breadth was positive with gainers outnumbering losers in the ratio of 9:1 on the BSE. BSE clocked a turnover of Rs 3,120 crore, higher than Tuesday's Rs 2,414 crore.

“Confidence in the market has increased with Infosys figures and the market is expecting such strong numbers from other blue chip companies,” he added.

“Technically, 10940 is a crucial level for the market and it has closed just a shade below that level today. If the indices can breach the mark, it may rally up to 11200 points, which is again a significant level,” said Sonthalia.

He said marketmen were keeping their fingers crossed and would take their major cues from the corporate results. Till then, the market is expected to consolidate around these levels.

“However, reports of a healthy rise in industrial and manufacturing output manifests that the overall business confidence and environment of the country has not changed,” he added.

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