Indian equity markets received another dose of reality on July 11 when markets—heavily reliant on the performance of top IT majors—opened in the red and continued to dip throughout the day. Benchmark indices Sensex and Nifty dropped more than 0.8 per cent each.
Through the trading hours of Friday, the BSE Sensex dropped more than 748 points to hit as low as 82,422.25 while the NSE Nifty 50 shed as much as 226 points to as low as 25,129—before settling at 82,500.47 and 25,149.85 on close, respectively.
TCS shares fell by as much as 3.46 per cent, as the market punished the IT major for less-than-impressive quarterly earnings. On Thursday, Tata’s IT arm posted a 6 per cent rise in quarterly net profit of ₹12,760 crore. However, the revenue was only ₹63,437 crore—a dip of more than 3 per cent on a constant currency basis.
“Q1 results of TCS indicate continuing struggle for IT companies, particularly large-cap IT. However, midcap IT is likely to do well,” said V.K. Vijayakumar of Geojit Investments.
TCS was joined by Mahindra, Airtel, Tata Motors, Titan, HCL Tech, Reliance, Bajaj Finance, Trent, and rival Infosys as the major losers in the 30-pack index. More than 20 constituents were closed in the red on Friday. HCL Tech settled around 1.6 per cent lower and Infosys 1.35 per cent lower.
The rout in the markets happened despite foreign institutional investors returning to Indian equities—they turned net buyers, buying ₹221.06 crore worth of equities on July 10. However, this did not help the markets on the day either, as the Sensex settled 0.41 per cent lower and the Nifty 0.47 per cent lower at the market close.
Through the week, the Sensex and Nifty have dipped more than 1.1 per cent.
