Markets turn volatile as Infosys fails to excite

Though the Infosys first quarter results were disappointing, given the high expectations of a section of traders, the markets opened the day on a strong note and sought higher levels for the first couple of hours.

Most frontline stocks traded firm in early trades despite the weakness in Infosys which spread to other IT stocks as well. Strong buying in banks, autos and consumer goods along with a mild recovery in oil stocks helped the indices to hold steady till noon.

The decline came all of a sudden and the speed with which the indices lost all of their gains and went deep into the red surprised most traders. Within minutes, both frontline indices were trading with losses of well over a per cent each.

The recovery during the last two hours of trade was equally spectacular. Most of the gainers from morning traders recovered fast and re-tested the earlier highs, some of them going well past their morning levels. IT stocks stayed weak, unable to recover on the face of heavy selling pressure.

The indices finally managed to close flat on a day which saw a 130 point movement on the Sensex between the highs and lows.
Sensex closed at 7304, a loss of 3 points, and the Nifty at 2221, a gain of 2 points. Nifty July futures discount to the spot index narrowed to 2 points from yesterday's 9 points.

VSNL, Tata Motors and ICICI Bank were among the major gainers among Nifty stocks while Infosys, Zee Tele and TCS were the major losers.