Infosys leads Sensex to rally over 100 pts; Axis Bank falls

Moneycontrol BureauLive Market Commentary

2:00 pm Results: Net profit of IndusInd Bank jumped to Rs 346 crore year-on-year in December quarter from Rs 267 crore. Its net interest income rose to Rs 730 crore on yearly basis.

According to CNBC-TV18 poll, analysts expected strong growth in topline as well as bottomline.

Profit after tax of the bank was expected to grow 21 percent year-on-year to Rs 328 crore and net interest income may rise 23 percent Y-o-Y to Rs 712 crore in the quarter ended December 2013.

1:50 pm Market check: The market is making smart gains led by IT stocks post third quarter results. The Sensex is up 253.35 points or 1.22 percent at 20966.72, and the Nifty surges 69 points or 1.12 percent at 6237.60. About 1249 shares have advanced, 1057 shares declined, and 371 shares are unchanged.

1:40 pm Narayana Murthy's views on results: Infosys, which reported quarterly earnings Friday that beat analysts’ expectations, is undergoing a transition and that the organization’s focus ahead would be on improving efficiency, the company’s executive chairman NR Narayana Murthy said.

In an conference call with analysts, Murthy answered a host of questions relating to the sluggishness in the company’s business in the last few years that seen rival TCS leapfrog it by a huge margin in revenue. “We will see the positive impact of the initiatives we have taken. The company’s employees are confident,” he said, adding that the company was working on improving sales and delivery effectiveness.

1:30 pm FII view: Clive McDonnell, head of emerging-markets equity strategy, Standard Chartered Bank is rather constructive on his outlook for emerging markets equities. He forecasts for the first time in three years that emerging markets (EMs) will outperform developed markets (DMs) in FY14.

Standard Chartered Bank has reduced its India rating from neutral to underweight. But McDonnell says the bank continues to have a positive Sensex target of 22000. The only reason it wants to pull back on India is to fund its increased preference for cyclical economies in North Asia.

He recommends investors to look at sectors such as the consumer discretionary space, telecom space and also selective energy names. He has cut back on allocation towards pharmaceuticals.

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IT heavyweights Infosys, Wipro, TCS led market rally as the Sensex is up 180.14 points at 20893.51. The Nifty up 50.30 points at 6218.65.

Shares of Infosys rose 3.6 percent intraday on Friday after it announced December quarter earnings. The stock is just Rs 5.80 away from touching its record high of Rs 3581 (tested on January 4, 2014). Investors are euphoric on the stock as the IT exporter raised its full year (FY14) dollar revenue guidance to 11.5-12 percent from 9-10 percent earlier, which was largely in-line with analysts' expectations of 11-12 percent.

Positive macro data also boost market sentiment as December trade deficit also narrowed to USD 10.14 billion versus USD 17.19 billion in the same month last year.

All eyes are now on industrial production output data for November which is seen growing to 0.6 percent compared with a contraction of 1.8 percent last month.

On the losing side M&M, Coal India, Axis Bank, Maruti Suzuki and Hero MotoCorp.