Infosys the bell weather software stock rose 16% on the 11th of January as the company surprised markets with a higher than expected revenue guidance. The company guided for a 6.6% rise in revenues against a previous forecast of 5% rise in revenues. The market was expecting the company to guide for weaker revenue growth and the stronger than expected revenue growth guidance prompted the market to cover shorts.
The positive guidance by Infosys will help other IT stocks including TCS, Wipro and HCL Technologies. IT stocks will help keep the Sensex and Nifty at higher levels as markets will push up IT stock prices going forward.
Japan unveiled a USD 116 billion fiscal stimulus program to boost the economy. Japan’s stimulus is expected to help the economy grow by 2%. The stimulus news weakened the Yen, which is trading at two year lows of JPY 89 to the USD. A weak Yen helps Japanese exporters, and Japan is largely an export driven economy.
China’s inflation for December 2012 came in at 2.5% and the inflation for full year 2012 stood at 2.6% from levels of 5.4% seen in 2011. Lower inflation in China will help policy makers adopt economy boosting measures. Improved economic growth in China will improve growth rates in economies across the globe.
The Indian Rupee gained last week on the back of better December 2012 trade deficit figures. Trade deficit for December 2012 fell by 8.7% month on month. The Euro rose on the back of the ECB holding on to rates in the Eurozone. Yen fell on Japan’s stimulus program. The Rupee should trend higher going forward on expectations of positive FII flows in 2013.
Select gainers and losers in BSE 500 last week.
Contributed by research associate Ketan Verma
Infosys Ltd topped the gainers list on the back of raising its sales forecast for the year ending March 31 while the market was expecting a lower guidance.
Havells India recorded a strong rise in the value of its shares after the investors expressed appreciation at the transfer of the brand name from one of its promoters to the company for free. The shares of the company were also boosted after foreign research firm Citi recommended a buy on the stock and set a range target price of Rs 734.
UK-based Diageo plc’s proposed open offer to buy up to 26% additional stake in United Spirits from January 7, 2013 has been postponed.
Shares of cement companies like Ambuja Cements Ltd fell on amid anticipation of poor October-December quarterly performance. Moreover, government plans regarding raising diesel prices have further dented sentiments in the cement counters.
Bhushan Steel has dipped after the company announced a rights issue.