Market downtrends, Infosys tax issues!

Investors in India are well aware of the positive and negative surprises of the volatile market. After four days of consecutive rise, indices of both the Indian bourses fell from near two and half year high. While the sensex fell 62.14 points (0.31 percent) to end at 20,223.98, the Nifty fell 30.40 points (0.49 percent) to end at 6,156.90.

Among the major losers were banks led by ICICI Bank; profit booking of rate sensitive stocks led to the fall. Drug makers were equally hit with the government’s announcement of a new drug pricing policy, directed towards increasing the number of drugs (subject to price caps) considered essential.

On the other hand, Infosys Ltd is creating news related to tax issues. The country’s second largest software services provider is all geared up to challenge the Indian income tax authorities of their raising of a tax demand of 5.77 billion rupees earlier this month.

Significant plunge for Sensex and Infosys today!

Indices of the Indian bourses slumping and gaining are humdrum affairs. But when the plunge happens significantly, concerns are raised. The Sensex slumped to its lowest close in seven months following Infosys q4 results beating market estimates. Revenue guidance provided by the country’s second largest IT service provider failed to meet expectations with lower-than-expected revenue. It recorded a 3.4 percent rise in quarterly profit, achieving Rs 40,352 crore against a projected Rs 40,746 crore in revenues besides not achieving the 10 percent projected target.

While Sensex provisionally plunged 300 points to 1.7 percent at 18,242.56, Infosys Ltd NSE shares fell 22.1 percent. It was only during the last two sessions that the index gained 316 points. Though consumer price inflation data and industrial production exhibited better-than-expected figures yet market sentiments were hurt. For sensex, the fall was the biggest since September 13; for Infosys, it was the biggest plunge since April 4, 2003.