Infosys shares drop over 5 per cent, Sensex down 485 points in early trade on Jan 17

Markets drop in early trade dragged by Infosys, Axis Bank while Reliance Industries traded over 2 per cent higher after reporting 7.4 per cent rise in December quarter net profit

Mumbai: Equity benchmark indices Sensex and Nifty declined in early trade on Friday after a three-day rally dragged by Infosys and Axis Bank. Also, continuous foreign fund outflows and muted global trends added to the markets’ decline.

The 30-share BSE benchmark Sensex declined 485 points to 76,557.79 in early trade. The NSE Nifty dropped 144.75 points to 23,167.05.

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From the 30-share blue-chip pack, Infosys dropped over 5 per cent despite raising its annual sales forecast for a third time this fiscal year. The shares were trading at Rs 1,831.00, down 4.94 per cent, at 10:31 am on the BSE.

Infosys Ltd, India’s second-largest IT services firm, on Thursday reported 11.46 per cent rise in the third quarter net profit on pick-up in demand, which also prompted the company to raise its annual sales forecast for a third time this fiscal year.

Axis Bank also fell by over 5 per cent post-earnings announcement. Tata Consultancy Services, HCL Tech, IndusInd Bank and ICICI Bank were the other big laggards from the pack.

In contrast, Reliance Industries traded over 2 per cent higher after the firm reported a 7.4 per cent rise in December quarter net profit as retail business rebounded, telecom earnings surged on higher tariffs and mainstay oil and petrochemicals business delivered consistent performance.

Tata Motors, Larsen & Toubro, Nestle and Asian Paints were among the other gainers. “There are two positives for the market today: One, the declining trend in the dollar index and the US bond yields continue. Second, the Q3 results from the big boys RIL and Infosys are better than expected.

“These two stocks have the potential to lead a minor recovery in the market. Even though the declining dollar index and US bond yields are positive, the declines are not adequate to arrest the sustained selling by FIIs. Therefore, any significant recovery in the market will be sold into,” V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.