What is your view on the market for Tuesday 19th April and do you see Infosys still putting pressure on the markets?

It was day of steep fall in the indices on Monday. Among indices, the Nifty cracked by over 300 points and the Sensex fell over 1,100 points in the day and this fall was largely driven by a handful of stocks led by Infosys. Infosys Q4 was way below the street expectations, leading to the stock of Infosys falling close to 8%, although it did recovered in second half.

The market structure was also not too strong. For instance, the Advance Decline ratio or the A/D ratio was marginally unfavourable at 24:26. At the same time, VIX spiked sharply to the 19.34 levels. On the back of news flows of positive insurance new business growth, private insurers rallied as did PSUs. Tech stocks and HDFC twins were the villains on Monday.

FPIs sold heavily at Rs.6,387 crore largely led by delivery selling in Infosys as domestic funds and LIC chipped in with buying of Rs.3,342 crore on Monday. On Monday, the Dow was down 40 points while NASDAQ was down 193 points. European markets were shut for Easter but the SGX Nifty is trading with gains of around 14 bps in early trades on Tuesday.

Coming back to the Infosys story, the delivery selling has been intense after the results and you could see this selling sustaining for some more time. There was also the spike in WPI inflation to 14.55% which hints at margin pressures getting on vulnerable sectors like metals, autos, chemicals, FMCG and paints in the coming quarters.