Sensex, Nifty hit day`s low; IT shares fall for 2nd day

The key equity barometers tumbled and hit fresh intraday low in mid-morning trade. The Nifty traded below the 16,600 mark. IT shares extended losses for second consecutive session.

At 11:28 IST, the barometer index, the S&P BSE Sensex, was down 462.63 points or 0.83% to 55,609.60. The Nifty 50 index lost 132.80 points or 0.79% to 16,586.65.

In the broader market, the S&P BSE Mid-Cap index slipped 0.17% while the S&P BSE Small-Cap index declined 0.26%.

The market breadth was weak. On the BSE, 1,265 shares rose and 1,969 shares fell. A total of 179 shares were unchanged.

Buzzing Index:

The Nifty IT index slipped 0.28% to 28,090.20. The index has lost 0.89% in two sessions.

Among the index constituents, Tech Mahindra (down 1.1%), Tata Consultancy Services (down 0.28%), Larsen & Toubro Infotech (down 0.22%), Mindtree (down 0.22%) and HCL Technologies (down 0.16%) declined.

However, Mphasis (up 2.13%), Coforge (up 2.07%) and L&T Technology Services (up 1.35%) edged higher.

Infosys shed 0.77%. The IT major reported a 5.7% decline in consolidated net profit to Rs 5,360 crore on 6.8% increase in net sales to Rs 34,470 crore in Q1 FY23 over Q4 FY22. On a year on year (YoY) basis, Infosys` net profit and revenue in Q1 FY23 increased 3.2% and 23.6%, respectively.

In dollar terms, the company reported revenues of $4,444 million, registering a growth of 17.5% YoY for the quarter ended 30 June 2022. Revenues in constant currency terms grew by 21.4% YoY and 5.5% quarter on quarter (QoQ). Operating margin for the quarter stood at 20.1%, a decline of 3.6% YoY and 1.4% QoQ.

For the year FY23, Infosys increased revenue guidance to 14%-16%. Margin guidance is retained at 21%-23%.

Stocks in Spotlight:

HFCL slumped 7.10%. The company`s consolidated net profit (from continuing operations) tumbled 41.45% to Rs 53.10 crore on 12.9% decline in net sales to Rs 1,051.02 crore in Q1 FY23 over Q1 FY22.

Yes Bank slumped 4.01%. The bank reported 50.2% jump in standalone net profit to Rs 310.63 crore on 9.7% increase in total income to Rs 5,916.28 crore in Q1 FY23 over Q1 FY22.

Net interest income (NII) stood at Rs 1,850 crore for Q1FY23, up 32% Y-o-Y and 2% Q-o-Q. Net interest margin (NIM) for Q1FY23 was at 2.4%, up nearly 30 bps Y-o-Y.

The bank`s provisions and contingencies (excluding tax provisions) sharply declined by 61.8% to Rs 175 crore in Q1 FY23, primarily aided by lower slippages.

The ratio of gross NPAs to gross advances stood at 13.45% as on 30 June 2022 as against 13.93% as on 31 March 2022 and 15.6% as on 30 June 2021. The ratio of net NPAs to net advances stood at 4.17% as on 30 June 2022 as against 4.53% as on 31 March 2022 and 5.78% as on 30 June 2021.

Global Markets:

Asian stocks were trading lower on Monday ahead of an important week in the U.S.

US stocks ended lower on Friday as disappointing earnings from Snap spooked investors and shares in social media and ad-tech firms dropped, offsetting gains from card issuer American Express following an upbeat forecast.

Later this week, all eyes will be on the Fed rate decision and the release of second quarter gross domestic product data in the U.S. The US Federal Reserve will opt for another 75 basis point rate hike rather than a larger move at its meeting next week to quell stubbornly-high inflation, as per reports.

Over the weekend, the World Health Organization declared monkeypox a global health emergency. The organization`s emergency committee was unable to reach a consensus, but WHO chief Tedros Adhanom Ghebreyesus made the decision to issue the highest alert, though he said it is unlikely to disrupt global trade or travel at the moment.

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