MUMBAI: India’s benchmark indexes declined on Friday and logged weekly losses as IT companies tumbled on mounting worries about earnings growth in the current quarter and amid persistent foreign outflows from domestic equities.
The Nifty 50 fell 0.47% to end at 23,203.2, while the BSE Sensex shed 0.55% to close at 76,619.33. They lost about 1% each this week.
IT stocks shed 5.8% to post their worst week in 10 months. Infosys and HCLTech, the country’s No. 2 and No. 3 IT firms, dropped 7.7% and 10%, respectively, for the week, the most on the Nifty.
“Though there was a pullback rally during the week, it’s becoming clear that the earnings this quarter are going to be subdued, which is weighing on markets,” said Sunny Agrawal, head of fundamental equity research at SBICaps Securities.
Infosys dropped 5.9% on the day after multiple
brokerages said its quarterly revenue increase was due to a higher component of third-party items in its deal pipeline, raising concerns over the quality of results.
HCLTech missed quarterly revenue estimates and though it raised its full-year revenue forecast, as did Infosys, analysts said the implications for the current fourth quarter for both companies were not encouraging.
That added further pressure on a market that is already grappling with concerns about last quarter’s earnings and an exodus of foreign investors.
Foreign portfolio investors have pulled out about $6 billion on a net basis from stocks and bonds so far in January.
That, in part, was also why the rupee logged its worst week in 18 months this week.
On the day, Axis Bank lost 4.5% after the lender’s quarterly profit missed market estimates due to slower loan growth.
The biggest gainer was Reliance, which climbed 2.8% after it topped third-quarter profit estimates on strong demand in its retail and telecom units.
The smallcaps and midcaps indexes were little changed on the week.
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