IT slide drags Indian shares; Reliance results eyed

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Indian stocks fell on Friday, snapping a six-day winning streak, dragged down by information technology (IT) shares after software services company Infosys cut its revenue forecast and reported weak customer spending.

the Nifty 50 The index settled down by 1.17 percent to 19,745, while the index was stable S&P BSE Sensex It lost 1.31 percent, to 66,684.26. Despite the pullback on Friday, benchmark indexes extended their gains for the fourth consecutive week, rising nearly 1 percent each.

Information technology decreased by 4.09 percent with Infosys You lose more than 8 percent and it drags the markets with it. The company, which reported a 10.9 percent increase in profit for the June quarter on Thursday, halved its full-year revenue growth forecast, citing cuts in technology spending.

“The guidance cut from Infosys is a huge shock,” three analysts from Kotak Institutional Equity wrote. “The weaker outlook is not only specific to Infosys, but reflects a broader sector slowdown in key segments.”

Consumer goods company Hindustan Unilever It lost 3.67 per cent after it missed seeing earnings for the June quarter due to higher costs.

heavyweight index Reliance Industries It fell 3.10 percent before June quarter results, after hours trading on Friday. Global brokerage firm Macquarie downgraded the stock to “underperform” from “neutral”, citing unfavorable ratings.

The slide in local stocks comes after six consecutive sessions of gains, as benchmark indexes climbed to new highs.

“The fabric of the short-term market is being overbought and therefore we could see some profit-taking at higher levels,” said Shrikant Chouhan, Head of Research (Retail) at Kotak Securities.

among individual stocks, Larsen and Toubro Profit of 3.88 per cent to a new record high after securing a construction order worth Rs 7,000 crore. The company will also consider proposing to buy back equity shares and pay a special dividend.

Union Bank of India It jumped nearly 4 percent, pushing public sector banks up 0.25 percent, after they posted higher profits in the June quarter.