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Sensex plunges below 13K mark; Infosys, Wipro drop

Sensex plunges below 13K mark; Infosys, Wipro drop
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First Published: Wed, Mar 28 2007. 05 59 PM IST
Updated: Wed, Mar 28 2007. 05 59 PM IST
India’s stocks fell the most in two weeks. Infosys Technologies Ltd. and Wipro Ltd. led exporters lower as the rupee traded at its highest in eight years.
“When companies, especially software makers, are dependent on exports, the rising rupee will cause concerns,” said Naresh Kumar Garg, who oversees $49 million of local assets at Sahara Asset Management Co. in Mumbai.
ICICI Bank Ltd. declined as a cash shortage forced lenders to borrow from the money market at increasing rates.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 239.98, or 1.8 %, to close at 12,884.34, its biggest loss since March 14. The S&P/CNX Nifty Index on the National Stock Exchange slid 1.5% to 3761.10.
India’s currency gained for a third day as banks exchanged dollars for rupees to replenish their cash after quarterly tax payments by companies last week drained money from the banking system.
Infosys, India’s second-biggest software maker, fell Rs67, or 3.3%, to 1,989.9. Wipro Ltd., the third-largest software maker, fell Rs27.95, or 4.8%, to 558.2.
The rupee rose as high as 43.02 against the dollar on 28 March, the highest since June 14, 1999. The currency has gained 3.4% this fiscal year beginning April 2006 compared with a 2% drop in fiscal 2005.
A stronger rupee makes Indian goods and services costlier in the international market, making the nation’s exporters less competitive.
Tata Consultancy Services Ltd., the nation’s largest software-exporter, fell Rs60.25, or 4.8%, to 1,201. Tata Consultancy sold its entire 40% stake in a local customer service joint venture with US-based Sitel Corp. for $17.7 million.
ICICI Bank, India’s biggest lender by market value, slid Rs18.4, or 2.1%, to 857.60. Bank of Baroda, India’s fourth- biggest lender by assets, fell Re1, or 0.5%, to 215.70.
Bank stocks declined as a cash shortage forced them to borrow from the money market at increasing rates. The rate banks charge each other on overnight loans have averaged 18% in the past two weeks, compared with 5.5% in the previous two weeks.
State Bank of India Ltd., the country’s biggest lender, fell Rs39.40, or 3.9%, to 974.20.
Overseas investors bought a net Rs6.79 billion worth of Indian shares on March 23, according to the latest information on the Securities & Exchange Board of India’s website.
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First Published: Wed, Mar 28 2007. 05 59 PM IST
More Topics: Money Matters | Equities |