The BSE benchmark Sensex snapped a five-week winning spree by tumbling 263 points to close at 18,675 during the current week on fresh selling following downgrade warning to India from a top global rating agency despite the government unleashing a wave of economic reforms to boost growth and revive investor sentiment. Standard & Poor’s (S&P) on Wednesday said there is a “one in three” change of a downgrade of the country’s sovereign rating to junk status in the next two years.
The news came after International Monetary Fund (IMF) slashed the third-largest Asian economy’s growth forecast for 2012 to 4.9 per cent from 6.1 per cent projected earlier, due to low business confidence and “sluggish structural reforms”.
The market got a further jolt due to disheartening revenue and earnings guidance in rupee terms for the current fiscal given by IT bellwether Infosys in its quarterly results announced on Friday.
Infosys posted 24.3 per cent jump in consolidated net profit at Rs 2,369 crore for Q2. The Bangalore-based software exporter lowered its revenue growth guidance for the current fiscal to 17.3 per cent from earlier target of 19.7 per cent.