Share markets in India witnessed a sharp fall in the final minutes of trade. At the closing bell, the BSE Sensex closed lower by 266 points. While, the NSE Nifty finished lower by 83 points. Meanwhile, the S&P BSE Midcap Index and the S&P BSE Small Cap Index ended down by 1.5% & 1% respectively.
Among BSE sectoral indices, IT index weighed down by Infosys, fell by 2%, followed by PSU stocks 1.8%, and healthcare stocks 1.6%. Infosys, BHEL, and Bank of Baroda were the top losers, while Axis Bank, M&M and Tech Mahindra were the top gainers on BSE.
Overseas, Asian equity markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.56% and the Hang Seng rose 0.40%. The Nikkei 225 lost 0.40%. European markets are lower today with shares in France off the most. The CAC 40 is down 0.66% while Germany’s DAX is off 0.36% and London’s FTSE 100 is lower by 0.11%.
The rupee was trading at Rs 64.03 against the US$ in the afternoon session. Oil prices were trading at US$ 48.67 at the time of writing.
Infosys share price dipped to its three-year low of Rs 873.5, extending its previous day’s fall of nearly 10% on National Stock Exchange (NSE) after the IT major’s buyback plan failed to cheer the markets.
The company on Saturday announced that it would buy back shares worth up to Rs 130 billion, or 4.92%, from investors at Rs 1,150 per share.
Tanushree Banerjee, Co-head of Research has written everything you need to know about the share buybacks in the IT sector and has offered insights on how the firms deal with the huge cash piles (Subscription Required). Here’s a snippet of what she wrote:
- “So, what should long-term investors do? There’s no doubt that tendering a part of your shares in a buyback could be a tempting proposition, especially if the buyback price is higher than the market price.
However, it’s important to understand that buybacks reduce the outstanding number of shares. Thus, the shareholders who don’t tender their shares will end up with a bigger piece of the pie.”
