Mumbai: Indian stocks closed lower on 7 May 2007 as the rupee climbed to its highest value in almost nine years. Expectedly, software exporters led by Infosys Technologies weighed down the benchmark Sensex as the rising currency raised concerns over earnings from exports.
“If the rupee remains at this level, we will see analysts cutting their earnings estimates to factor in its appreciation,” said Nikunj Doshi, who helps manage the equivalent $541 million in equities at Kotak Mahindra Asset Management Co. in Mumbai.
Indian Oil Corp. led refiners higher on expectations falling oil prices will result in lower losses at refiners that are forced to sell fuel at below-market prices.
The Bombay Stock Exchange’s Sensex slid 55.02 points, or 0.4% , to 13,879.25. Twenty-two stocks in the 30-share index declined, while eight rose.
In the wider market, the 50-share Nifty on the National Stock Exchange fell 6.20 points, or 0.2% , to 4,111.15.
Infosys, the second-largest software exporter, slid Rs33.45, or 1.6% , to Rs2,038.8. Wipro, India’s third- largest computer-services exporter, declined Rs12.7, or 2.2%, to Rs554.7. Satyam Computer Services Ltd, India’s fourth-biggest, fell Rs10.20, or 2.2% , to Rs460.35.
Indian software companies get more than half their revenue from the U.S.
The rupee rose 0.5% to 40.6450 against the dollar as of 3:36 p.m. in Mumbai, according to data compiled by Bloomberg.
Oil marketers gain on crude drop
Oil fell for a sixth day in New York, extending a 6.8% drop to $61.93 a barrel last week because of ample US supplies and signs gasoline output is rising as refiners return plants from maintenance.
Indian Oil, the country’s biggest refiner, added Rs18.35, or 4.2%, to Rs460.50. Hindustan Petroleum Corp.gained 3.9% to Rs288.65. Bharat Petroleum Corp. jumped Rs15.4, or 4.6%, to Rs350.05.
“Lower oil prices and a strengthening rupee will stem losses at oil refiners,” Doshi at Kotak said.
The Indian government bars refiners from raising retail prices for fuel in line with the increase in crude oil costs to control inflation. State-run refiners lowered gasoline prices by as much as 6% last year when crude oil in New York rose 0.02% .