Mumbai: Shares fell 0.85% on Thursday , with export-driven technology stocks among the big losers on worries that escalating debt problems in Europe, their second-biggest market , may prompt clients to cut costs.
Investor confidence was also dented by the prospect of foreign fund outflows after Greece’s shock move to call a referendum on its latest bailout plan prompted a global risk-off sentiment.
At 12:09pm, the main 30-share BSE index was trading down 0.7% at 17,342.4 points, with 21 of its components falling. Foreign funds had invested about $445.01 million in October, helping the index rise 7.6%.
“The situation globally is very volatile. The volume in the Indian markets is also pretty low making it difficult to gauge whether it will see a sharp fall from the current levels. It all depends on how the eurozone crisis pans out,” said Jigar Shah, senior vice-president at brokerage KIM ENG Securities.
Analysts said the markets are at a cross-road and are expected to recover after the G-20 summit, set to be dominated by the threat of a Greek exit from the euro zone, that began on Wednesday .
India’s No. 1 software services exporter Tata Consultancy Services fell 1.43%, while rivals Infosys Technologies and Wipro were down 1.7% and 1.36%, respectively.
The euro zone debt crisis is a worry for the sector that has been looking to increase its sales to the region to hedge against their excessive exposure to the United States.
In the September-quarter, TCS posted a slightly lower-than-expected rise in quarterly profit, while No. 2 Infosys met street forecasts in its earnings.
Banking shares also fell on concerns over eroding asset quality on the back of a series of interest rates hikes which have affected corporate earnings and slowing growth in Asia’s third-largest economy.
Private lenders HDFC Bank fell 2%, while ICICI Bank traded 1.07% lower. Top state-run lender State Bank of India bucked the trend and traded 0.38% up.
Central bank raised interest rates last month for the 13th and possibly final time in a tightening cycle that began in early 2010, on expectations that persistently high inflation will finally begin to ease starting in December.
However, data on Thursday showed that the food price index rose 12.21%, its highest in 9 months.
India’s largest steel maker Steel Authority of India traded 2.66% lower ahead of its quarterly earnings . A Reuters poll of 10 brokerages has estimated net profit to fall 21 pct to 8.56 billion rupees.
India’s largest cement producer Ultratech Cement fell as much as 1.45% after its shipments in October fell 6.8% from a year ago to 3.19 million tonnes.
Appetite for cement in India, the world’s second-largest producer after China, has retreated in recent quarters on excess supply and a slump in the construction and property industries due to high interest rates and slowing economic growth.
Hindustan Unilever fell 2% on profit-booking after the stock rose 11% since the start of the week. The company on Monday posted a forecast beating 22% jump in quarterly net profit.
The 50-share NSE index was trading down 0.49% at 5,233.05 points. In the broader market, gainers were slightly ahead of losers in the ratio of 1.2:1 on total volume of about 156.5 million shares.
MSCI’s broadest index of Asia Pacific shares outside Japan fell 1.81%, while S&P 500 futures traded in Asia lost 1.36%.
Mobile content provider OnMobile Global rose 5.85% after its September-quarter net profit more than doubled to Rs 477.2 million.
Hindustan Motors fell 5% after the cars and auto parts manufacturer posted a net loss in the July-September quarter.