The Bombay Stock Exchange’s Sensitive Index fell to its lowest in more than three years. Tata Consultancy Services (TCS) led declines among software makers as the US economy contracted at the fastest pace in more than 25 years.
The broader 50-share Nifty of the National Stock Exchange also tumbled by 81.85 points or 3.11 per cent to close at 2,553.15 from its last close.
Manufacturing activity in India shrank for the fourth straight month in February as the global downturn hurt demand and soured business sentiment, a survey showed. Data showed India’s exports in January fell an annual 15.9 per cent to $12.38 billion, a fourth straight loss as the global slowdown shaved off demand for Indian goods. Market sentiment was also dampened by consistent FII outflows, which amounted to more than $1.6 billion in January and February this year.
The weak economic data would worsen the market’s plight in March, which was usually volatile due to unwinding ahead of the financial year end. The rupee’s tumble and coming general elections would enhance uncertainties and weigh on foreign investment, bankers said. Brokers said the market, however, recovered from the day’s low of 8,563.52 as domestic institutional investors absorbed part of FII unloading.
TCS, the biggest software exporter, fell 4.8 per cent on concern that sales in the US, India’s largest software market, will weaken. Oil & Natural Gas Corporation (ONGC), the No 1 oil producer of the country, led commodity producers lower, after metal and crude prices declined.
ICICI Bank fell 7.1 per cent, leading lenders lower, after Indian exports plunged the most in a decade in January as the global recession damped demand.
The Sensex fell 284.53, or 3.2 per cent, to 8,607.08, its lowest since November 20. The S&P CNX Nifty Index on the National Stock Exchange declined 3.2 per cent to 2,674.60. The BSE 200 Index slid 3 per cent to 1,013.88. S&P CNX Nifty futures for March delivery dropped 3.9 per cent to 2,629.
TCS fell 4.8 per cent to Rs 459.85, its lowest since October. Infosys Technologies, the second-largest software exporter, slid 1 per cent to rs 1,219.05. Wipro, ranked third, dropped 2 per cent to Rs 203.40, its lowest since October 2003. India’s software exporters derive more than half their revenue from the US.
Sterlite Industries (India), the No 1 copper producer, fell 1.6 per cent to Rs 241.05. Hindalco Industries, India’s biggest aluminum maker, declined 1.4 per cent to Rs 38.05.
Asian indices ended down by about 1.7 per cent to 7.0 per cent followed by sharp falls by about 2.0 to 3.0 per cent in the European markets in their early trade. Market players said the dismal US economic data and the Federal Reserve’s decision to lower the US growth forecast for 2009 almost endorsed worries that the financial crisis could pull the global economy deeper into recession
Reliance Industries (RIL), India’s most valuable company, dropped after it offered one of its shares for every 16 held in Reliance Petroleum as it seeks to buy back its refining unit. The parent fell 3.2 per cent to Rs 1,225.65, while the unit declined 1.4 per cent to Rs 75.3.
Investors in the Mukesh Ambani Group companies lost nearly Rs 6,800 crore in a day On Monday even as RIL absorbed the refining unit in a share swap deal.
Realty sector was the worst hit, shedding another 8 per cent on speculation in global markets of a fresh wave in the credit crisis.
