Business | Markets
Banking stocks pull Sensex down
Indian shares fell 2.81 per cent yesterday as investor fears of a recession in the US again spooked global markets, with software services exporters such as Infosys Technologies leading losses.
- Reuters
- Published: 00:14 February 7, 2008
Mumbai: Indian shares fell 2.81 per cent yesterday as investor fears of a recession in the US again spooked global markets, with software services exporters such as Infosys Technologies leading losses.
Markets worldwide have buckled this year on concerns a US recession will drag down global growth and signs of more subprime-mortgage related problems in the financial sector.
India's benchmark BSE 30-share index closed 523.7 points down at 18,139.49, with 28 components in the red. It fell about four per cent in opening deals.
Shares in software services exporters, which earn more than half of their revenue from the US, fell with bellwether Infosys down 6.3 per cent to Rs1,510.60.
Its rival and top exporter Tata Consultancy Services fell 5.2 per cent to Rs900.55, while the sector index dropped 5.6 per cent.
"The technology stocks are taking a beating because of the uncertainty in the US ... I don't think that in these times any of our companies are going to get higher billing rates," said Jayesh Shroff, a fund manager with SBI Mutual Fund.
"It all depends on how much budget American corporates allocate this year," he said.
In the broader market, 1,476 losers beat 1,298 gainers on total volume of around 438 million shares.
The BSE index is now 14.5 per cent below a life high of 21,206.77 hit on January 10.
Asian stocks were headed for their biggest fall in two weeks after much weaker than expected service sector data in the US and Europe fuelled fears of recession.
Indian banks have no exposure to the US subprime mortgage crisis but shares in No 2 lender ICICI Bank fell 3.1 per cent to Rs1,152.85, while bigger rival State Bank of India lost two per cent to Rs2,183.10.
The banking sector index fell 2.3 per cent.
"I think we are just over reacting to the global banking crisis as our banking system is much more conservative than the Western world," said Gajendra Nagpal, chief executive at Unicon Financial.
Top mortgage firm Housing Development Finance Corp fell three per cent to Rs2,975.85. The stock had risen eight per cent in the three sessions to Tuesday's close.
The 50-share NSE index was down 2.94 per cent at 5,322.55.
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