Indian stocks fell, with the benchmark Sensitive Index holding at a 2-year low on concern that surging credit costs will deepen a global slowdown.
Tata Consultancy Services, the largest software developer, dropped 7 per cent to its lowest in more than three years. Infosys Technologies, the second-largest software exporter, fell 1.3 per cent to its lowest in more than two years.
Stock earlier rose after India’s central bank allowed banks to set aside smaller reserves for the first time in five years to add cash to the financial system.
“Investors have no confidence in the bailout package and measures from central banks to inject liquidity will do little to address the structural problems in the US,’’ said Jayesh Shroff, who helps manage about $3.5 billion at SBI Mutual Fund in Mumbai.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, slid 0.9 per cent to 11,695.24. The index held at its lowest since September 12, 2006. It earlier gained as much as 3.2 per cent. The S&P CNX Nifty Index on the National Stock Exchange added 0.1 per cent to 3,606.60. The BSE 200 Index declined 1.2 per cent to 1,406.62. Nifty futures for October delivery added 1.3 per cent to 3,671.
Tata Consultancy dropped 7 per cent to Rs 575.90, the lowest since May 18, 2005. Infosys fell 1.3 per cent to Rs 1,301.80, the lowest since June 14, 2006. Wipro, the third-largest, dropped 3.1 per cent to Rs 308.30, the lowest since April 21, 2005. Satyam Computer Services, the fourth-largest, slid 5.4 per cent to Rs 278.50, the lowest since October 18, 2005. The companies get more than half their sales from the US.
The International Monetary Fund will cut its global economic-growth forecast “pretty significantly’’ this month as the financial crisis throttles lending, Managing Director Dominique Strauss-Kahn said October 4. The IMF is due to release updated forecasts next week. In July, it estimated global growth of 4.1 per cent for 2008 and 3.9 per cent in 2009.
on Tuesday’s declines followed a rout that wiped more than $2 trillion from global markets yesterday, sending the Dow Jones Industrial Average to its first close below 10,000 for the first time in four years, after bank bailouts in Europe widened and commodities producers slid on concern global growth is slowing. Overseas funds sold a net Rs 1,046 crore ($219 million) of Indian stocks on October 3, the nation’s market regulator said.
