Sensex off day’s high; Nifty Bank hits record high; Infosys dips

10:20 am FII View:The recent strife at Infosys raises many question marks and is a cause for concern, said Hugh Young, Managing Director of Aberdeen Asset Management-Asia, one of the largest foreign institutional investors in Indian markets.

Young said that the conflict between the Infosys founders and the software major’s board over corporate governance and severance payments to former top executives was not particularly healthy.

Young said the news that Infosys’s peer TCS was mulling a buyback of shares was good news as it has a strong balance sheet and surplus cash, adding that other IT companies may follow suit.

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10:00 am Market Check

Benchmark indices erased some early gains on account of selling pressure in technology and FMCG stocks. HDFC Group stocks continued to support the market.

The 30-share BSE Sensex gained 178.59 points at 28479.86 and the 50-share NSE Nifty rose 42.90 points to 8820.90 despite mixed Asian cues.

The broader markets also came off day’s high, with the BSE Midcap and Smallcap indices rising 0.4 percent each on positive breadth. About 1209 shares advanced against 744 declining shares on the exchange.

There is desperate money coming into the market and the sheer lack of other investment opportunities is compelling investors to run towards equity, says Ajay Srivastava, CEO of Dimensions Corporate Finance Services.

However, he cautions, the market valuations are not cheap and investors need to be picky and ready to take ‘serious risks’ to see healthy returns.

HDFC Bank jumped 6 percent after the Reserve Bank of India has withdrawn the limit for purchase of bank’s shares. The rally also spilled over to HDFC that was up 1.3 percent.