Sensex tanks 257 pts, rupee slides to 55.94

The Sensex on Thursday crashed by 257 points, its worst single-day fall in nearly seven weeks, after IT major Infosys' sharp cut in earnings outlook soured market sentiment prompting investors to shrug off even better-than- expected factory output growth in May.

The BSE benchmark index, which had lost 129 points in the previous session, dropped further by 256.59 points, or 1.47 per cent to close at 17,232.55, recording the biggest single-day fall for the 30-share index after 1 June this year.

While Infosys' first quarter profit at Rs 2,289 crore came in lower than expected, the stock tanked over 8 per cent as the company revised it FY13 US dollar revenue growth guidance to 5 per cent year-on-year compared to 8-10 per cent given at the end of March quarter.

‘Infosys results disappointed on all counts... the key issue now is will a price war start in the sector and hence even other companies could start exhibiting signs of strain,’ said Bhuvnesh Singh, analyst, Barclays.

The 50-share NSE index Nifty fell by 71.05 points, or 1.34 per cent to 5,235.25, dipping below crucial 5,300 level.

The rupee also weakened by 31 paise to close at 55.94 as against the US dollar on Thursday.
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