Infosys Shares Crashes over Allegations of 'Unethical Practices'

Published October 28th, 2019 - 10:22 GMT
Infosys shares tanked nearly 17 per cent to mark their worst intraday fall in over six years.
Infosys shares tanked nearly 17 per cent to mark their worst intraday fall in over six years. (Shutterstock)

Indian equities took a pause after a six-session winning run on Tuesday, with IT major Infosys' shares crashing following allegations of "unethical practices" against the company's chief executive. The BSE gauge Sensex closed 334.54 points, or 0.85 per cent, lower at 38,963.84. It hit an intra-day low of 38,924.85 and a high of 39,426.47.

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The broader NSE Nifty, too, tumbled 73.50 points, or 0.63 per cent, to settle at 11,588.35. The Indian market opened after an extended weekend.

Infosys shares tanked nearly 17 per cent to mark their worst intraday fall in over six years during the day after the IT services giant said it is investigating claims by anonymous whistleblowers accusing CEO Salil Parekh of "unethical practices" to shore up profits through irregular accounting.

The IT services major saw its stock closing 16.21 per cent lower at Rs643.30 apiece on the BSE, wiping out Rs53,451 crore from the company's market valuation.

Other top losers were Tata Motors, Bharti Airtel, HCL Tech and Bajaj Finance, shedding up to 3.51 per cent.

Among the major gainers were ICICI Bank, Sun Pharma, Bajaj Auto, HUL and HDFC, rising up to 3.06 per cent.

Sectorally, BSE IT and tech suffered a major blow due to Infosys crisis - losing as much as 7 per cent.

Telecom, metal and auto were among the other sectoral losers.

On the other hand, BSE healthcare, consumer durables, bankex, finance, oil and gas, FMCG and realty indices rose up to 1.56 per cent.

In the broader market, BSE midcap index slipped 0.09 per cent, while the smallcap index rose 0.48 per cent.

"Profit-booking in select largecaps and negative sentiments after whistleblower allegations against Infosys CEO resulted in Sensex and Nifty to end 0.85 per cent and 0.63 per cent lower below 39,000 and 11,600 levels, respectively. Banking stocks emerged as clear winners while IT stocks dragged. Underlying sentiments however remained supportive on global front as well as on domestic front as exit polls showed that the BJP will retain office in Maharashtra and Haryana," said Paras Bothra, Head of Equity Research, Ashika Stock Broking.

Market participants also kept a close watch on political developments in the country as the BJP looked set to retain power with a bigger mandate in Maharashtra, where it is in an alliance with the Shiv Sena, as well as in Haryana, as exit polls have forecast a facile victory for the party in the two states and a rout for its rivals, led by the Congress.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a positive note after US President Donald Trump on Monday said progress in developing the text of a partial trade pact with China means he will likely be able to sign it next month.

Equites in Europe were trading on a mixed note in their respective early deals.

Meanwhile, the Indian rupee appreciated by 20 paise to close at 70.94 against the US dollar.

Brent crude futures, the global oil benchmark, rose 0.36 per cent to USD 59.17 per barrel.


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