Sensex falls to lowest in a month

Stocks fell to their lowest in a month, led by Tata Consultancy Services (TCS) and other software exporters on concern that a deepening recession in the US would erode earnings from their biggest export market.

Grasim Industries and Maruti Suzuki India paced gains among cement and automakers after the government announced a cut in excise-tax rates. Tata Steel led rivals lower after UBS AG said producers had overestimated demand.

“No one has a handle on how bad things are in the US,” Kenneth Andrade, head of investments at IDFC Asset Management Co, said. “To kick-off credit, the government will need to nationalise the liabilities side of the business at banks.” He oversees assets worth $1.8 billion.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 0.2 per cent to 8,822.06. The S&P CNX Nifty Index on the National Stock Exchange declined less than 0.1 per cent to 2,733.90. The BSE 200 Index retreated 0.6 per cent to 1,037.66. S&P CNX Nifty futures for February delivery added 0.2 per cent to 2,727.70.

TCS, the nation’s largest software exporter, fell 1.1 per cent to Rs 468.90. Wipro, India’s third- biggest provider of software services, dropped 1.1 per cent to Rs 212.90. The US accounts for more than half the revenue of software developers.

State Bank of India slid 1.6 per cent to Rs 1,027.8, its worst since July 1. HDFC Bank lost 1.4 per cent to Rs 854.50.

In the US, Standard & Poor’s 500 Index dropped 3.5 per cent yesterday to its lowest since April 1997. US regulators said they will begin examining which banks have enough capital to survive a deeper recession.

Tata Steel slid 4.4 per cent to Rs 160.75. Steel Authority of India (SAIL), the No. 2 producer, fell 4.3 per cent to Rs 76.10.

UBS AG said producers had overestimated demand. The report said global steelmakers have raised output too quickly in response to a bounce in Chinese demand.

India’s acting Finance Minister Pranab Mukherjee announced a cut in excise duty to 8 per cent from 10 per cent to help stimulate the economy. The 4 per cent cut in value-added tax announced in December will be extended beyond March 31, Mukherjee said On Tuesday.

Grasim added 2.8 per cent to Rs 1,382.75. Ambuja Cements, a unit of the world’s second-largest cement maker Holcim, rose 1.2 per cent to Rs 69. Maruti Suzuki India gained 1.9 per cent to Rs 641.2.