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Shares continue slide, techs plunge

Shares continue slide, techs plunge
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First Published: Mon, Aug 22 2011. 01 04 PM IST
Updated: Mon, Aug 22 2011. 01 04 PM IST
Mumbai: Shares traded weak on Monday in see-saw trade after last week’s heavy sell-off, as investors fretted over the health of the global economy, darkened by fears of a slowdown in India’s economic growth.
The main 30-share Bombay Stock Exchange (BSE) index was down 0.4% at 16,084.36 points by 12.31 pm, with 19 of its components in the red. Last week, the index logged its fourth straight weekly loss, its longest such streak since the 2008 collapse of Wall Street investment bank Lehman Brothers Holdings Inc.
Asian stocks also surrendered early gains and turned lower on Monday, adding to last week’s steep losses, while gold shot to new highs as investors worried about the sluggish US economic outlook and Europe’s festering debt crisis.
“The market sentiment will continue to remain bearish and will depend on how the situation in Europe unfolds,” said Neeraj Dewan, a director at brokerage Quantum Securities in New Delhi.
“There could be some bounce back in the course of the week but that is possible only if no more bad news comes from the global markets.”
Finance minister Pranab Mukherjee said on Friday Indian stock markets had been affected by the US market sentiments but the country’s economy was robust and the growth story was intact.
“These comments have been discounted,” Dewan said. “The prospects on the domestic macro front are not too bright either.”
Losses were led by software stocks on worries about a drop in outsourcing demand in a weak global economy.
Shares of India’s three largest IT companies were down, with -- Tata Consultancy Services giving up 2.1% while Infosys and Wipro each traded down 1%.
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 its two biggest markets.
The BSE index, which is down 21% this year, dropped 5% last week, extending its losses to 14% in four straight weeks, its longest weekly losing streak since September 2008.
Financial stocks were also down on fears that high interest rates would hurt borrowers’ ability to repay loans and increase delinquencies.
Shares of India’s top public lender, SBI, were down 1.36%, while HDFC Bank traded 1.77% lower.
Shares of state-run National Aluminium Co Ltd (Nalco) rose more than 4% after it said it had won government approval to mine a coal block in the eastern state of Orissa, which has an estimated reserve of 70 million tonnes.
Stocks on the move
Shares of Mphasis reversed early losses to trade up more than 5% after the company described as “completely false and incorrect” reports of a raid on its premises by the Central Bureau of Investigation.
IT firm Four Soft Solutions Ltd traded up more than 8% after it said it had signed a deal with a global logistics firm.
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First Published: Mon, Aug 22 2011. 01 04 PM IST
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