IT, banking stocks pull down Sensex

The Bombay Stock Exchange Sensitive Index fell to a month’s low On Thursday, led by information technology and banking sectors.

Software providers like TCS, Infosys, Wipro and Sasken Technologies were impacted following North American telephone equipment maker, Nortel Network’s decision to file for bankruptcy. Banking stocks fell sharply due to recession concerns that could lead to slower credit growth and rising non-performing assets. The Bombay Stock Exchange’s Sensitive Index or Sensex hit an intra-day low of 8,946. 62, before recovering to close at 9046.74, lower by 323.45 point. The National Stock Exchange’s S&P CNX Nifty closed 2736.70, down 98.60 points.

The US market closed in the red yesterday, on reports that the consumer spending in US has fallen by 2.7 per cent, double than the 1.2 per cent that analysts forecasted and Nortel’s bankruptcy woes. The Dow Jones and S & P 500 were down by 2.94 per cent and 3.35 per cent, respectively.

Asian markets also closed weak. Nikkei 225 and Hang Seng were down by 4.92 per cent and 3.37 per cent. Ved Prakash Chaturvedi, managing director, Tata Asset Management, said that weak global cues were taking a toll of Indian markets. All the sectoral indices were down significantly. The bankex was down 5.67 per cent, realty by 4.72 per cent and metals by 4.53 per cent.

Among stocks, the big losers were Sasken Communication Technologies, which lost 18 per cent, as Nortel is one of its top clients. Satyam Computers fell sharply by 32 per cent to Rs 20.30, its lowest in since July 1998, after reports said that the company is unlikely to get a bailout package from the government.