Sensex ends 100 points down, shrugs off +ve IIP data, Infy nos

The benchmark Sensex closed with a loss of over 100 points on the back of selling in rate sensitive, commodities and telecom stocks, and shrugged off better-than-expected November IIP (Index of Industrial Production) data. Weak global cues also weighed on the markets.

However, short covering in technology stocks post better-than-expected quarterly numbers from IT bellwether Infosys Technologies and buying in M&M, Tata Power, RIL & L&T limited the losses to some extent.

Earning season kicked off with a good start from Infosys' third quarter results, which were higher than expected. It posted 2.73% jump in its Q3 net profit of Rs 1,582 crore and revenues went up 2.8% at Rs 5,741 crore (QoQ). EBIDTA (earning before interest, depreciation, tax and amortisation) margins increased to 35.49% versus 34.61% (QoQ).

"The contribution from top ten clients grew by 12.2% during the quarter. Our clients are taking decisions much faster," said S D Shibulal, Chief Operating Officer. "Our focus on New Engagement Models (NEMs) was strengthened by the launch of Flypp™, our latest technology platform for telecom service providers."

Moshe Katri, MD, Cowen & Co, was surprised by the sequential growth in EBITDA margins. Katri said Infosys was headed towards a normalised 15-20% growth rate. He had an 'outperformer' rating on the stock. According to him, the IT major may report an EPS of USD 3 (Rs 135) for CY11.

Infosys gained 3.97%. Wipro and TCS shot up 4.9% each. HCL Tech rose 3.68% and Tech Mahindra was up 0.65%. Mahindra Satyam gained 1.5%.