Mumbai: It was a day of consolidation as the bulls took a breather after a two-day rally. The Nifty started off strong, but soon slipped on indifferent European cues to close flat at 4.979, while the Sensex closed at 16536 down 20 points.
Investors were also nervous ahead of I-T major Infosys' Q2 results that are slated to come out tomorrow.
Though the street expects the company's dollar revenue to be in-line with guidance, Infy is expected to beat on rupee EPS.
According to a CNBC-TV18 poll, Q2 dollar revenue is seen up around 5 per cent at $ 1,756 million. At the same time rupee revenue is seen up around 8 per cent at Rs 8,080 crore.
Infosys is expected to post EBIT at around Rs 2,187 crore. Meanwhile, PAT for the second quarter of the fiscal is seen up around 10 per cent at 1,891 crore.
The earnings per share is expected to be up around 9 per cent at Rs 32.9. This is way ahead of the expectation of a negative to zero EPS growth.
The IT index closed the day down 2.7 per cent.
However, global cues have been positive in the short-term on the back of the news that Sarkozy and Merkel will announce a big package possibly in the first week of November.
But K Ramanathan of ING Investment Management feels the package is going to be a temporary solution. “It doesn’t solve the fact that global growth is going to be slow. There could possibly be a recession, a short recession in Europe especially, while the news from the US seems to be on the positive side.”
Likewise, V Anantha Nageswaran of Asianomics feels that the rally seen by most of the globe is a sucker's rally, not just in the global markets, but also in markets like India. "The rally is based on garbage. Investors have been proving to be remarkably myopic."
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