Sensex sheds 1.6% ahead of G-20, Infy falls

Sensex sheds 1.6% ahead of G-20, Infy falls

Bangalore: Indian shares fell 1.58% on Friday to their lowest close in more than two weeks as the gloomy global economic outlook wilted early gains, with wary investors eyeing this weekend’s G20 meeting for some direction.

Infosys Technologies dropped 3.3% to a one month closing low of Rs1,217.90 after CLSA said the tech bellwether might miss its revenue guidance in dollar terms for the December quarter on a worsening global financial crisis.

Tata Teleservices (Maharashtra) gained 12.2% to Rs20.19. NTT DoCoMo Inc and Tata Sons have priced their joint open offer for up to 20% of Tata Teleservices at Rs24.70 a share.

“There is unwinding happening at higher levels because investors are not feeling confident at all in carrying positions overnight," said Amit Khurana, head of institutional equities at Colin Stewart.

“Investors are not putting too much bet on any ground-breaking announcement coming out of the G20 meeting."

The 30-share BSE index closed down 150.91 points at 9,385.42, its lowest close since 29 October, with 23 of its stocks falling. It rose as much as 3.04% in opening deals and then dropped as much as 2.82% during trade.

“The international outlook is not very clear at this point and, therefore, this kind of volatility will continue," said Amitabh Chakraborty, president equities at Religare Securities.

The index, which has lost more than half its value in 2008 to be one of the worst Asian performers, declined 5.8% in the week after rising in the last two consecutive weeks.

Even a sharp fall in annual inflation to 8.98% as at 1 November from 10.72% a week earlier, expected to open the door for further cuts in interest rates, proved little comfort to the market.

Brokerage India Infoline said in a report any rally would be short-lived as the undertone remained sluggish due to financial sector gloom and persistent concerns over the global economy. “All eyes will be fixed on G20 meeting in Washington, as leaders of top countries will talk on what needs to be done to solve the current financial crisis," it said.

The G20 summit of industrialised and emerging economies will explore ways to deal with the world’s biggest financial crisis in decades. Leaders will be reminded of the deepening economic gloom by a report expected to show the euro zone has slipped into recession.

Economists have lowered their forecasts for India’s economy, with many now expecting growth to slow to 7% or less in the year to March 2009, sharply slower than rates of 9 percent and higher clocked up in the past three fiscal years.

Shares in Bharti Airtel rose 3% to Rs650.15. Citigroup said it had a “buy" rating on India’s top mobile operator with a price target of Rs900 on expected stable revenue share despite the entry of new players.

In the broader market, 1,593 losers outpaced 934 gainers on normal volume of 286 million shares.

The broader 50-issue NSE index fell 1.34% to 2,810.35.