statesman news service
MUMBAI, 3 JUNE: Anticipating a turnaround in Infosys Technologies’ fortunes after its co-founder Mr NR Narayana Murthy’s returned at the helm as executive chairman on 1 June, the stock of the IT major zoomed almost eight per cent this morning on Dalal Street. Brokerages as well as investors expect Mr Murthy to restore Infosys back on the path of progress.
The share touched Rs 2,624.90 on the BSE and Rs 2625 on the NSE. It pared early gains to end the day at Rs 2,513.95 (up 4.42 per cent) and Rs 2,514.10 (up 4.25 per cent) on BSE and NSE respectively.
Infosys gaining after several weeks failed to cheer the markets reeling under sell-off pressure in auto, oil and interest rate sensitive shares.
Global negative clues also hit investor confidence as the rupee continues to depreciate against the American dollar. Continuing its free fall for the fifth straight session, the rupee today slumped by 26 paise to hit a new 11-month low of 56.76 on fag-end dollar buying and capital outflows.
In the morning, all Asian markets ended with varying losses in their indices. The top loser was Tokyo’s Nikkei which closed 3.7 per cent down shedding 513 points at 13,262. Benchmarks on Dalal Street suffered more because European exchanges started the week almost one per cent down. France’s CAC, Germany’s DAX and FTSE of London were all down more than per cent. They recovered a bit later.
The S&P BSE Sensitive Index closed at 19,610.48 down 149.82 points or 0.76 per cent. The 50-share Nifty of the NSE ended 0.78 per cent 46.65 points down at 5,939.30. In Sensex 10 shares advanced and 20 declined while in Nifty the ratio was 17:33.
The day belonged to Infosys. The return of Mr Murthy prompted many investment bankers to come out with fresh assessment of the Infosys Technologies’ share. Goldman Sachs says: “Return of Mr Murthy after seven years may boost long-term investors’ confidence in the company.”
Morgan Stanley “maintains overweight rating. Leadership is likely to improve performance of Infosys but this could take six to nine months to reflect in company’s financials. Merrill Lynch said: “We raise on target PE to 16X our financial year 2014-15 EDE at 10 per cent discount to TCS from current 30 per cent and raise the target price to Rs 2,850 from Rs 2,350 anticipating possible upside risk to earnings.
In the 30-stock Sensex the top losers included Hero MotoCo at Rs 1,667.55 (down 3.65 per cent), Bajaj Auto at Rs 1,762.20 (down 3.32 per cent), ONGC at Rs 317.55 (down 2.85 per cent) and HDFC at Rs 868.90 (down 2.40 per cent).