Sensex, Nifty rise; all eyes on Infy row
Benchmark equity indices rose 0.9% on Wednesday after shares of India’s second-largest software services exporter Infosys Ltd continued to recover from the steep losses after the sudden resignation of its chief executive officer and managing director Vishal Sikka.
Largely calm world markets also ensured stable sentiment in the domestic market. Market participants say all eyes are now on how Infosys manages to resolve its leadership crisis, and how geopolitical tensions, particularly in the Korean peninsula, shape up in the coming days.
The Sensex climbed 0.88% or 276.16 points to 31,568.01 points, while National Stock Exchange’s 50-share Nifty rose 0.89% or 86.95 points to close at 9,852.50 points. Seventeen stocks advanced for every 10 that declined.
Financial stocks and Infosys contributed the most to the gains on the Sensex. State Bank of India rose 1.70%, while peers ICICI Bank Ltd. and HDFC Bank Ltd. climbed 1.67% and 1.29% respectively after the Cabinet decided to take consolidation in the banking sector to the next level by setting up a ministerial panel led by finance minister Arun Jaitley to consider and oversee merger of 21state-owned banks.
Shares of Infosys closed 1.98% higher at ₹894.50. They had eroded 14.46% over Friday and Monday, hit by the sudden resignation of Sikka.
“If a solution does arrive for Infosys leadership crisis, which is acceptable to investors, market can see a sharp upward swing. If the situation gets worse, we can see further losses in the market,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services Ltd.
Investors were mostly skeptical on the developments in the Infosys leadership row.
“I think there is limited upside for Infosys shares. Any bounceback should be used by investors to monetize their current holdings,” said Ajay Bodke, CEO and chief portfolio manager at brokerage Prabhudas Lilladher Pvt. Ltd.
Meanwhile, foreign institutional investors (FIIs) have sold a net $1.6 billion in Indian shares so far this month, while domestic institutional investors (DIIs) have invested a net of ₹11,562.92 crore.
“Globally too, the geopolitical risks need to be watched, and the developments will decide how the world markets and investors will react,” added Rawal of Anand Rathi.