Stocks drop 0.5%; Techs down; SBI up

Stocks drop 0.5%; Techs down; SBI up

Mumbai: Indian shares were trading 0.5% lower on Thursday, as investors turned nervous on global economic growth slowdown worries which sent world stocks lower.

The US trade gap widened in June, suggesting its second-quarter economic growth was weaker than previously thought.

The report came days after the US Federal Reserve issued a gloomier outlook for the economy and followed a spate of data from China confirming its rapid imports and factory output growth was slowing.

Export-focused outsourcers led the losers on global economic growth worries.

Sector leader Tata Consultancy Services dropped 1.3% while rivals Infosys Technologies and Wipro were down 0.9% and 1.4% respectively.

By 11:56 am, the BSE 30-share index Sensex was trading down 0.48% at 17.983.28 points, with 22 of its components declining.

“Market is down tracking global cues. It is in the consolidation phase for now," said RK Gupta, managing director of Taurus Mutual Fund. “I would recommend buying from a medium-to-long term perspective as our fundamentals are strong."

Investors awaited June industrial output data for Asia’s third-largest economy, which is due around 0530 GMT.

Industrial output is expected to rise 8.4% in June from a year earlier, with growth slowing after eight months of double-digit increases, the median forecast of 22 economists showed.

Energy giant Reliance Industries continued to decline, as investors were concerned about the delay in the ramp up of its gas production.

The stock, which has the highest weighting on the Sensex, was down 1%. It has dropped 7.6% since 27 July, when it unveiled its quarterly results.

Weakness in broader markets pulled down most financials.

Leading private lenders ICICI Bank and HDFC Bank were down 0.6% and 0.5% respectively, while mortgage lender Housing Development Finance Corp shed 0.8%.

Top lender State Bank of India, bucked the trend and edged 0.4% higher, ahead of its quarterly earnings announcement later in the day.

Top utility vehicles maker Mahindra & Mahindra fell 0.7% after Korean firm Ssangyong Motor named it as the preferred bidder.

Tata Steel, world’s seventh-largest steel maker by output was down 0.9%. It is due to announce its June-quarter results later in the day.

In the broader market, losers led gainers in the ratio of 1.3:1 in a volume of 95 million shares.

The NSE 50-share index Nifty was down 0.44% at 5,397.00 points.