Mumbai: Worries over a prolonged global economic slowdown sent the BSE Sensex to its lowest close in nearly six weeks on Wednesday, as a last-minute budget deal by Washington to avoid a US default turned investor focus to its impact on growth.
The United States stepped back from the brink of default on Tuesday but congressional approval of a deficit-cutting plan failed to dispel fears of a credit downgrade and future tax and spending feuds.
The main 30-share BSE index ended down 0.94 per cent, or 169.34 points, at 17,940.55, its lowest close since June 23. Twenty of its components fell.
"Definitely the market is down mainly on global concerns and also there are no positive triggers from the domestic front. Banks and IT companies stocks have fallen because of doubts over growth in the US," KK Mital, head of portfolio management services at Globe Capital, said.
India's top software services exporter Tata Consultancy Services shed 1.8 per cent, while smaller rivals Infosys and Wipro fell 0.67 per cent and 0.6 per cent respectively.
India's $76 billion software services sector exports more than half of its services to the United States, whose economy stumbled badly in the first half of 2011 and came close to contraction in the first quarter.
Lenders ICICI Bank and HDFC Bank fell 1.93 and 0.17 per cent, respectively, on worries over sticky inflation and rising interest rates in Asia's third-largest economy.
Top Indian mobile carrier Bharti Airtel fell as much as 4.5 per cent after it reported a bigger-than-expected 28 per cent fall in quarterly profit, hit by losses at its African operations and as costs of its new third-generation network in India weighed.
DLF Ltd fell as much as 5.5 per cent to 215.20 rupees a day after the leading listed real estate developer posted a 12 per cent fall in quarterly net profit, hit by higher operational and land costs, and as it received a tax notice of 5.5 billion rupees in the quarter from the authorities.
The 50-share NSE index fell 0.95 per cent to 5,404.80 points. In the broader NSE market, 903 losers led 524 gainers on total volume of about 573 million shares.
Indian engineering and construction firm Larsen & Toubro dropped 4.3 per cent to 1,658.75 rupees on concerns it may have to cut its growth outlook due to rising interest rates and a slowdown in projects.
Auto stocks including Tata Motors and Mahindra and Mahindra fell 2.95 and 2 per cent respectively, on worries over slowing demand as sales growth has been nearly flat in recent months, with higher fuel prices and rising interest rates denting demand.
On Tuesday, the S&P 500, Wall Street's benchmark index, lost 2.6 per cent while global stocks, as measured by MSCI's world equity index, slipped into negative territory for the year to date.
MSCI world equity index was down 0.41 per cent by 1051 GMT, while emerging equities slipped 1.5 per cent.
Stocks that moved
Shares of state-run oil marketing companies and airlines were trading higher as a sharp fall in international crude prices lifted sentiment.
Indian Oil Corp, Bharat Petroleum Corp., Hindustan Petroleum Corp were up between 0.91 and 1.78 per cent, while Jet Airways, Kingfisher Airlines and SpiceJet rose between 0.88 and 2.3 per cent.
Wockhardt fell 3.77 per cent to 441.60 rupees, after French foods company Danone said it agreed to buy the Indian firm's nutrition business for about 250 million euros ($355 million) and enter the baby nutrition and medical nutrition markets in India.
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