Sensex Opens Lower; Infosys Drops 4.5%

Mon, 16 Apr 09:30 am

   Previous Close   

   Pre-Open   

   12:30 pm   

   Closing   

Asian share markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.3% while the Hang Seng is down 1.6%. The Shanghai Composite is trading down by 1.5%. Over the weekend, US stocks closed mixed.

Back home, India share markets opened the day on a negative note. The BSE Sensex is trading lower by 113 points while the NSE Nifty is trading lower by 26 points. The BSE Mid Cap index and BSE Small Cap index both opened the day down by 0.1% & 0.3% respectively.

Sectoral indices have opened the day on a mixed note with FMCG stocks and consumer durables stocks witnessing buying interest. While, IT stocks & energy stocks have opened the day in red. The rupee is trading at 65.22 to the US$.

In the news from the IT sector. Infosys share price opened the down by 4.5% after the management guided for 100 bps reduction in EBIT (earnings before interest & tax) margin guidance for FY19.

Although the results came in-line, and the management gave out an in-line FY19 revenue growth guidance of 6-8% in constant currency terms, the street showed disappointment in the 22-24% margin guidance. This was reflected in its ADR opening 5% lower on Friday from its previous close of US$18.

After opening at US$17.1, the ADR touched lows of US$16.5 before closing at US$16.6.

The management has attributed the drop in margin guidance to required investment in the digital business, localisation within markets, especially developed ones (scaling up of local talent and data centres), investing in reskilling its employees and for revitalizing its sales team.

Further, the reaction that resulted in ADR decline was slightly overdone as these steps would mean that the revenue generation would be enhanced at the cost of margins.

Moreover, the company has identified an amount of up to Rs 104 billion to be paid out to shareholders in FY19 (apart from regular dividend), which would provide support to the stock price.

In another development, non-performing assets (NPAs) or bad loans in the banking sector are set to shoot up by at least Rs 80 billion as advances to the scam-hit Gitanjali Gems group have turned bad during the quarter ended 31 March.

Reportedly, banks will have to make provisioning of Rs 80 billion for Gitanjali alone as there has been no servicing of the working capital loan during the fourth quarter of last fiscal. Gitanjali, among others, is the major account which has turned bad in the fourth quarter of 2017-18.

Gross NPAs of all the banks in the country amounted to Rs 8409.6 billion in December, led by industry loans followed by services and agriculture sectors, as per the government estimates.

Gitanjali is promoted by Mehul Choksi, uncle of billionaire diamantaire Nirav Modi, who defrauded Punjab National Bank (PNB) of over Rs 130 billion by getting fake letters of undertaking/credit (LoU/LoCs) issued from one of the bank's branches in Mumbai.

A special CBI court in Mumbai has issued non-bailable warrants (NBWs) against Modi as well as Choksi.

A consortium of 21 banks led by Allahabad Bank had first extended working capital loan to it in 2010-11. In 2014, ICICI Bank became the lead banker as it had highest exposure of about Rs 9 billion and in line with the revised guidelines of the Reserve Bank of India.

Till December 2017, the loans to Gitanjali Gems were standard and regular debt servicing was being done. There is no servicing of debt in the last quarter ended 31 March, so it has to be declared NPA by all banks, the reports noted.

Unlike the real gold, the mineral lookalike hardly has any intrinsic, social, or market value. However, its deceptive appearance has fooled many into believing that they have stumbled upon a gold mine, just like Gitanjali Gems, a stock that has fallen from grace yet again.

Most investors in stock markets suffer from short-term memory. The past debacles are quickly forgotten with investors making a beeline for dud stocks, only to burn their fingers repeatedly. Back in July 2013, after the stock of Gitanjali Gems had slumped on charges of market manipulation by its promoters, it was being lapped up by institutional investors hoping to cash-in the long run.

Gitanjali Gems, the Fall Guy

The stock of Gitanjali Gems has nosedived on several occasions since 2013, eroding market capitalisation by over 80%.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Top Gainers TodayTop Gainers over 1-WeekTop Gainers over 1-MonthTop Gainers over 1-YearTop Gainers over 3-YrsTop Gainers over 5-YrsTop Losers TodayTop Losers over 1-WeekTop Losers over 1-MonthTop Losers over 1-YearTop Losers over 3-YrsTop Losers over 5-YrsOnly BuyersOnly SellersMost Active StocksMost Popular Stocks52 Week High Stocks52 Week Low Stocks

INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

10 results 25 results 50 results 100 results All results

Indian Share Market Update: Top Gainers and Losers