×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Markets join global equities rout; techs plunge

Markets join global equities rout; techs plunge
Comment E-mail Print Share
First Published: Fri, Aug 19 2011. 12 21 PM IST
Updated: Fri, Aug 19 2011. 12 21 PM IST
Mumbai: Markets fell as much as 2.2% on Friday and are on course to log their fourth straight weekly loss, dragged by a battering of global equities on growing worries that the US economy was sliding back into recession.
Lingering worries about a slowdown in India’s economic growth and profitability of domestic companies due to surging interest rates also weighed on investor sentiment.
Infosys , India’s No. 2 software services company, led the losses in the market, falling as much as 7.8% to their lowest level in more than 21 months on worries about a sharp drop in outsourcing demand in a weak global economy.
India’s showcase $76 billion software and services sector, which has already been reeling under competitive pressure and sluggish demand, counts the United States and Europe as the two biggest markets.
At 12:14pm, India’s main 30-share BSE index was trading down 1.8%, or 300.09 points, at 16,170.95, with all but seven of its components in the negative territory.
The index, which is down more than 21% this year, had earlier fallen as much as 2.2% to 16,114.60 points -- its lowest since May last year.
“We already have a slightly gloomy prospect on the domestic macro front and to top it the global economy is looking much worse now than it was six months ago,” said Nitin Rakesh, chief executive of Motilal Oswal Asset Management Company.
“In a global environment like this, it is very difficult to predict the course of the market. We just have to wait it out.”
Asian stocks extended losses, with South Korea’s benchmark shedding 5% on Friday, and gold prices rose to an all-time high as investors rushed into safe-havens after heavy losses on US and European markets overnight.
European equities suffered their biggest daily slide in 2-1/2 years on Thursday, while the S&P 500 index fell 4.5%, the sixth time in two weeks that it has moved by 4% or more in a single session.
Concerns about a slowdown in Asia’s third-largest economy added to the negative cues from the overseas markets. Morgan Stanley had pared this week its growth forecast for the current fiscal year to 7.2% from 7.7% earlier.
Larsen & Toubro , India’s top engineering and construction firm, was down 4.9% at 1,548 rupees on concerns that a slowdown in GDP growth would crimp investment in infrastructure projects.
Top power equipment firm Bharat Heavy Electricals was also down nearly 4% at 1,693 rupees.
Shares in other Indian software exporters that have large exposure to the United States also took a hit on prospects of a cutback in technology spending by their overseas clients and pressure on pricing for their services.
Tata Consultancy Services , the sector leader, fell 3.8% to 926 rupees and No. 3 exporter Wipro dropped as much as 5.4% to 310.50, its lowest level in nearly two years.
Shares in index heavyweights Reliance Industries and the country’s No. 2 lender ICICI Bank , dropped 2% and 1.9%, respectively, on selling by institutional investors.
The 50-share NSE index was down 1.8% at 4,855.10 points.
In the broader market, losers were ahead of gainers in the ratio of 5.8:1 with 322 million shares changing hands.
STOCKS
GTL fell as much as 8% to Rs 47.65 after the telecoms infrastructure firm reported a 68% drop in its April-June quarter net profit.
State-run Power Finance Corp was down 4% at Rs 143.65. Sources told Reuters late Thursday that the company had raised more than 32 billion rupees via 5-year and 15-year bonds.
Comment E-mail Print Share
First Published: Fri, Aug 19 2011. 12 21 PM IST
More Topics: Markets Update | India | BSE | NSE | Sensex |