In the wake of an unprecedented and non-stop record-breaking rally, equity benchmark indices took a significant tumble in early trade on Friday. The bearish trend was primarily influenced by IT behemoth Infosys, which shocked investors by slashing its FY24 growth outlook. The decline in share prices of market bluechip firms Reliance Industries and Tata Consultancy Services also contributed to the overall downturn in the equities market.
The 30-share BSE Sensex, which had been on a remarkable winning streak for several days, plummeted by 749.75 points to 66,822.15 in early trading. The NSE Nifty experienced a similar downward movement, falling by 203.15 points to 19,776. Both benchmark indices opened the day on a weak note.
Infosys suffered a significant blow, with its shares witnessing a nearly 8 percent drop. The company reported a lower-than-expected 11 percent rise in net profit for the June quarter, attributing the underperformance to delayed decision-making by clients amid global macro uncertainties. Furthermore, Infosys delivered an unexpected revelation by reducing its FY24 growth outlook to a range of 1-3.5 percent.
Other major companies in the Sensex pack also experienced a decline, including HCL Technologies, Wipro, Hindustan Unilever, and Tech Mahindra. The overall sentiment in the market was dampened due to these developments.
In contrast, there were some gainers in the market, such as Larsen & Toubro, State Bank of India, Nestle, Power Grid, and Tata Motors.
Meanwhile, Asian markets showed mixed performance, with Tokyo trading lower while Seoul, Shanghai, and Hong Kong quoting in the green. In the US markets, the closing session on Thursday witnessed mostly negative outcomes.
Additionally, the global oil benchmark Brent crude rose by 0.78 percent to USD 80.26 a barrel, indicating the ongoing volatility in the energy markets.
Just a day prior to the sharp decline, the BSE benchmark had achieved a remarkable feat, settling at its all-time closing high of 67,571.90, registering six consecutive days of winning momentum. The intra-day peak also reached a record high of 67,619.17, witnessing a strong rally during the day.
Similarly, the Nifty had a notable gain of 146 points, culminating in a record closing high of 19,979.15. Intra-day trading reached an even higher record at 19,991.85, further highlighting the previous optimism in the market.
Foreign Institutional Investors (FIIs) were active buyers on Thursday, injecting confidence into the market as they purchased equities worth Rs 3,370.90 crore, as per exchange data. However, the sudden downturn caused by Infosys’ revised outlook may lead to cautiousness among investors in the coming days.
