Both the front line indices, benchmarks Sensex and Nifty, on Thursday logged their biggest single-day drop in four months. Sensex plummeted by 32.94 points to 24,234.15 while Nifty slid by 94 points and ended the session at 7,235.65. Rupee also weakened by 10 paise, logging its fourth loss in five sessions, to end at Rs 59.03 per dollar.
As per market experts, indices were pulled down by a sharp 7.81 per cent plunge in shares of Infosys and the expiry of monthly derivative contracts. They further added, heavy selling by foreign institutional investors (FII) also dented the overall sentiment of the markets pushing them further down.
Information technology (IT) giant Infosys slumped 7.81 per cent to end below the crucial Rs 3,000 per share mark for the first time since mid-September 2013 after the resignation of President B G Srinivas, who was considered a top contender for the CEO post. The stock slid by Rs 247.90 by the end of the session. Infosys, the top loser in 30-share Sensex, alone contributed more than 135 points to the barometer's fall.
Infosys stock plunged nearly 8 per cent eroding over Rs 14,000 crore from its market valuation, after the company's board member and President B G Srinivas, considered as the top contenders for the first non founder CEO post, resigned.
The IT bellwether's scrip declined by 7.81 per cent to settle at Rs 2,924.30 on the Bombay Stock Exchange. In intra-day session, it had lost 8.1 per cent to Rs 2,915. At the Nation Stock Exchange, the stock tumbled 3.43 per cent to close at Rs 2,921.30. Infosys ended below the crucial Rs 3,000 mark for the first time since mid-September 2013.
Tracking weakness in the stock the company's market capitalisation (m-cap) dropped by Rs 14,235.12 crore to Rs 1,67,923.88 crore.
In terms of volumes, 4.04 lakh shares of the company changed hands on the BSE, while over 51 lakh shares were traded at the NSE during the day. Fall in the scrip was also instrumental in sending the Sensex down by 321.94 points.
Srinivas' is the 10th top-level exit from the Bangalore- based company since the return of co-founder NR Narayana Murthy at the helm of affairs in June last year. Neither Srinivas nor the firm gave reasons for the sudden move, which outsiders like former Infosys CFO V Balakrishnan felt was because he may have lost out in the race for the top job.
Balakrishnan, who himself was considered a candidate while serving his tenure at Infosys, said, “I think, he (Srinivas) would have resigned as he might have come to know that he is no more in the race for CEO.”
Srinivas, who was Infosys' highest-paid executive (annual compensation of Rs 7.52 crore in 2013-14 fiscal), led key portfolios like financial services, manufacturing and public services. His resignation will be effective June 10.
Meanwhile, the domestic currency also weakened by 10 paise to end at Rs 59.03 per dollar following fresh demand for the US currency from importers and capital outflows linked to fall in shares.
The rupee commenced a tad higher at Rs 58.92 per dollar and improved further to a high of Rs 58.79 per dollar on initial dollar selling by exporters. It later turned negative and dropped to a low of Rs 59.07 per dollar. On Wednesday, it had gained 11 paise after depreciating 57 paise in the previous three sessions. The dollar index was down by 0.15 per cent against its major global rivals, ahead of a report on US economy.
On the market front, selling was seen across the market as 11 out of the 12 sectoral indices ended the session with losses. IT index was the biggest loser and fell by 3.44 per cent along with technology index which slid by 2.92 per cent. Other losers included oil & gas, capital goods, real estate and power indices which fell by 1.64 per cent, 1.49 per cent, 1.37 per cent and 1.16 per cent respectively. Healthcare index was the sole gainer in the market and managed to end the session with marginal gains of 0.02 per cent.
The Sensex resumed the session lower at 24,523.13 points and hovered in a range of 24,528.20 and 24,206.50, before settling at 24,234.15, a fall of 321.94 points or 1.31 per cent. This is its biggest fall since 426.11-point crash on January 27. This closing level is its lowest since 24,298.02 on May 21. The NSE 50-share Nifty dipped 94 points, or 1.28 per cent to end at 7,235.65. This is biggest drop since January 27 when it slid 130.90 points.
On Sensex, 22 stocks out of the 30 shares comprising the index fell while 7 finished higher and Gail India ruled steady. Other major losers from the Sensex pack were ONGC, Wipro, BHEl, Cipla, Coal India, l&T and HDFC Bank which fell by 2.65 per cent, 2.63 per cent, 2.23 per cent, 1.80 per cent, 1.77 per cent, 1.70 per cent and 1.56 per cent respectively. However, Hindalco rose by 1.43 per cent, M&M by 1.38 per cent and Dr Reddy's lab by 1.32 per cent.
FIIs also were seen as heavy sellers which further dragged the markets down. As per the provisional data provided by the stock exchanges, FIIs sold shares worth Rs 522.9 crore on Thursday.
The market breadth turned negative as 1,551 stocks ended in the red, 1403 finished in the green while 103 ruled steady. Total tunrover fell toRs 3,688.15 crore from Rs 3,954.80 crore on Wednesday.
Asian stocks ended mixed today as investors weighed a worse-than-estimated drop in Japan's retail sales before a report on the US economy, say analysts. Key benchmark indices in China,Hong Kong, South Korea and Taiwan moved up by 0.14 per cent to 0.47 per cent while indices in Japan and Singapore moved up 0.07-0.88 per cent.