Concern over US market pulls down stocks

Mumbai: Indian stocks fell, driving the benchmark index to its biggest weekly decline in three months, amid concern the US will lower its second-quarter growth estimate.

Infosys Technologies Ltd, which gets two-thirds of sales from North America, led declines among software companies after a survey showed the US economy probably slowed in the second quarter even more than initially estimated. DLF Ltd, biggest developer, dropped the most in 12 weeks.

"The continuous flow of negative news from the US is a cause of worry as the US still remains the engine of global growth," said Sadanand Shetty, a Mumbai-based fund manager at Taurus Asset Management Co, which manages $640 million (Dh2.3 billion) in assets. "Risk aversion may cause a short-term fund outflow."

The Bombay Stock Exchange's Sensitive Index, Sensex, dropped 2.2 per cent this week, the most since the week ended May 21.

The S&P CNX Nifty Index on the National Stock Exchange dropped 1.3 per cent to 5,408.7. The BSE 200 Index retreated 1.1 per cent to 2,309.07.

The US economy probably slowed in the second quarter as companies reined in inventories and the trade deficit widened, economists said before a report today.

Growth cooled to a 1.4 per cent pace from April through June, the smallest gain in the year-old recovery, according to the median forecast of 81 economists surveyed by Bloomberg News.