Sensex ends flat, IT stocks take a hit

The Bombay Stock Exchange Sensitive Index fell marginally On Thursday, led by software exporters, after the rupee climbed to a one-month high, crimping the value of overseas shipments.

Tata Consultancy Services (TCS), India’s largest software developer, sank 6.2 per cent, the most in almost four weeks. Infosys Technologies, the second-biggest, declined 3.3 per cent, to its lowest since December 5. Reliance Communications, the nation’s second-largest mobile-phone company, rose to its highest in more than a month on a report the company may sell a stake to investors.

The Sensex fell 9.44, or 0.1 per cent, to 9,645.46. The S&P CNX Nifty Index on the National Stock Exchange slid 8.10, or 0.3 per cent, to 2,920.15. The BSE 200 Index added 0.3 per cent to 1,128.12. Nifty futures for December delivery rose 0.3 per cent to 2,945.

Stocks also retreated on concern lower technology budgets will cut revenues at Indian software developers. Many buyers, especially financial services companies, are planning to cut information technology budgets by between 10 per cent and 20 per cent, Ashwin Shirvaikar, a New York-based analyst at Citigroup, said in a note to clients On Thursday.

The Indian rupee gained for a seventh day, climbing 1.1 per cent to 48.4950 per dollar as of 3:53 pm local time. The US accounts for more than half the revenue of software developers.

TCS dropped 6.2 per cent to Rs 507.65, the most since November 18. Infosys slid 3.3 per cent to Rs 1,134.90. Wipro fell 4.4 per cent to Rs 249.70. Satyam Computer Services declined 5.1 per cent to Rs 224.45, the most since November 11.

Reliance Communications added 4.7 per cent to Rs 239.15, its highest since November 4. Strategic investors from the US and Europe are keen to buy a 26 per cent stake in the company, it was reported.

Meanwhile, Asian stocks rose, driving the region’s benchmark index to a fifth day of gains, as the US moved closer to a $14 billion rescue of American car companies and South Korea cut interest rates to a record low.

The MSCI Asia Pacific Index advanced 1.6 per cent to 87.78 as of 7:29 pm in Tokyo, capping a five-day, 10 per cent gain. The index has rallied 17 per cent since reaching a five-year low on November 20.