Markets crash: All eyes on Infy results

New Delhi: The markets gave up to the bears today and corrected by almost 130 points on the Sensex, taking it below the 9500 level.

The market witnessed huge selling pressure and ended in the red. The Sensex closed down 138.15 points or 1.44per cent at 9445.30.

It touched an intraday high of 9600.08 and an intraday low of 9418.63.

The Nifty closed down 39.30 points or 1.35per cent at 2870.80 and the CNX Midcap Index closed down 24.40 points or 0.58 per cent at 4213.65.

Results are expected to shape the market movement now, especially with Sensex biggies like Infosys that unveils its results tommorow.

Experts reveal what's expected and how can one play this stock now.

Amit Dalal of Amit Nalin Securities says, "My observation for Infosys is that by November-December, it will start touching 30 times forward year earnings. But this time the bull rally has been far higher than before and we have seen new Japanese money come in and a whole new set of holders come in, so markets have gone a little ahead of that."

He adds that, for Infosys to march to a new level of discounting, whether it is 30 times FY07 or 35 times FY06, there is a need for a whole new advent of investors into technology stocks, but right now there is no sign of that.

Open: 10/Dec

Close: 9/Nov/05

% Change

Infosys

Rs. 3037

Rs. 2873.60

5.7% UP

Technical analyst, Deepak Mohoni says, "Within the tech pack, we see that Wipro had a weak finish yesterday, and we are not bullish on Wipro in the short-term anyway. Infosys showed an interesting recovery in the last three-four minutes of trading, so perhaps that could save the Index today as well, if there is pressure from the other heavy weights. But technology is not the leading momentum sector right now."

Ravi Chadha of Prodigy Investments says, "Clearly the way, the market has been, it is in an uptrend, and I think the earnings season will meet expectations. Infosys will give its results tommorow, while this quarter may not be as big as the September quarter for software, nevertheless it will be good."

On the broader IT space, Mihir Vora of ABN Amro AMC says, "IT is one sector, where I am not very concerned about any kind of bubble in-terms of valuations, because these are efficient companies and the ROC’s are extremely high. ROCs are in excess of 40–50% and there is visible earnings growth of about 25% for the next few years with upside potential triggers. So given that, we don’t think valuations are stretched in IT. So we are staying invested in IT."