Friday, February 20, 2009

Worst Week for Sensex drops 8.2 %

Mumbai: Share prices fell on Friday, driving the benchmark index to its worst week in four months. Infosys Technologies Ltd led software exporters lower after Hewlett- Packard Co. (HP) cut its profit forecast.
Infosys slid 2.6% as the recession saps demand for computers in the US, from which India’s software exporters derive more than half their revenue. Wipro Ltd declined 3.8%. ICICI Bank Ltd led lenders lower after Goldman Sachs said the government’s plan to borrow record amounts this fiscal year will drive up interest rates.
“Globally, news flows aren’t good and locally the government’s borrowing programme will result in interest rates remaining high,” said Jayesh Shroff, who helps manage $1.9 billion (Rs9,480 crore) in equities at SBI Asset Management Co. Ltd in Mumbai.
The Bombay Stock Exchange’s (BSE) Sensex fell 199.42 points, or 2.2%, to 8,843.21. The index dropped 8.2% this week, its biggest decline since the week ended 24 October. The S&P CNX Nifty index on the National Stock Exchange (NSE) declined 52.90 points, or 1.9%, to 2,736.45.
Futures on the Standard and Poor’s 500 index dropped 0.9%. US stocks declined on Thursday, sending the Dow Jones Industrial Average to a six-year low. HP had its steepest tumble since August 2004 after the company lowered its operating profit forecast for the year to a range of $3.76-3.88 a share from an earlier range of $3.88-4.03.
Infosys slid 2.6% to Rs1,177.15. Tata Consultancy Services Ltd fell 3.2% to Rs474.05, its lowest since 26 December. Wipro declined 2.3% to Rs215.25.
ICICI dropped 7.1% to Rs335.85, the lowest since 3 December. Housing Development Finance Corp. Ltd fell 2.9% to Rs1,352.40, the lowest since 25 November. The share prices are composite of BSE and NSE rates.
“India’s consolidated fiscal deficit may rise to 10.3% of gross domestic product in the year to 31 March and 10% of GDP in the next year,” Goldman Sachs said in a note to clients on Friday.” The increase in the supply of government securities may not be accompanied by a similar increase in demand, and risk-free rates may rise,” said Tushar Poddar, an analyst at Goldman Sachs.
Kingfisher Airlines Ltd declined 3.5% to Rs31.90. The regulator of airports has asked the carrier to pay part of its dues for the use of airports by March, Mint reported, citing a government official it didn’t name.