By Pooja Thakur
Jan. 15 (Bloomberg) -- India’s benchmark stock index fell to the lowest in more than a month. Tata Consultancy Services Ltd. and Infosys Technologies Ltd. led declines after a Canadian customer for their software services collapsed.
Tata Consultancy sank 5.3 percent, the most in a month, and Infosys slid 4 percent after mounting losses prompted phone equipment maker Nortel Networks Corp. to seek court protection from creditors. ICICI Bank Ltd., India’s second-largest lender, retreated 7.4 percent as a drop in U.S. retail sales fanned concern that the global recession will deepen.
“Markets are reacting to the dismal news on U.S. retail sales and the bankruptcy filing of Nortel,” said Ajay Bodke, who helps look after about $1 billion in equities at IDFC Assets Management Co. in Mumbai.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 3.5 percent to 9,046.74, its lowest since Dec. 5. All but one stock in the Sensex fell. The S&P CNX Nifty Index on the National Stock Exchange slid 3.5 percent to 2,736.70. The BSE 200 Index declined 3.2 percent to 1,079.71. Nifty futures for January delivery fell 3.1 percent to 2,726.10.
U.S. retail sales dropped for a sixth month, shrinking 2.7 percent in December, the longest stretch of declines since tallies began in 1992, the Commerce Department said yesterday. The retreat was more than twice the pace economists estimated.
Deepening Recession
Nortel made the bankruptcy filing a day before a $107 million interest payment was due and was granted protection in Ontario Superior Court yesterday. Nortel’s U.S. subsidiary made a Chapter 11 filing in Wilmington, Delaware, after financing dried up amid a deepening recession.
Tata Consultancy, India’s largest software developer, fell 5.3 percent to 510.45 rupees, the most since Dec. 11. Infosys, the No. 2 developer, dropped 4 percent to 1,251.70 rupees. Wipro Ltd., the No. 3, slid 3.5 percent to 235.25 rupees.
Sasken Communication Technologies Ltd. slumped 18 percent to 43.80 rupees, its lowest since 2005. JPMorgan Chase & Co. said the Indian telecommunications supplier that counts Nortel amongst its top three clients may lose orders because of the bankruptcy filing. Sasken earns about 10 percent of its revenue from Nortel, P. Jaykumar, Sasken’s head of investor relations, said from Bangalore.
ICICI Bank fell 7.4 percent to 408.65 rupees, its lowest in a month. Reliance Industries Ltd., India’s most valuable company, declined 3.2 percent to 1,142.35 rupees. The two account for about 21 percent of the Sensex’s weighting.
Overseas funds sold a net 3.34 billion rupees ($68 million) of Indian stocks on Jan. 13, according to the nation’s stock market regulator.
The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:
Bharti Airtel Ltd. (BHARTI IN) dropped 19.1 rupees, or 3.1 percent, to 603.65, its lowest since Nov. 20. India’s largest mobile-phone operator’s stock rating was cut to “neutral” from “overweight” at JPMorgan. Idea Cellular Ltd. (IDEA IN) fell 2.55 rupees, or 5.6 percent, to 42.90, its lowest since Nov. 20, after its stock rating was reduced to “underweight” from “overweight.”
Infotech Enterprises Ltd. (INFTC IN) dropped 17.85 rupees, or 18 percent, to 82.55, the most since 2002. The Indian software service company focused on computer-aided designing said profit in the three months ended Dec. 31 fell 32 percent to 144.70 million rupees. The company reported currency losses of 224.6 million rupees in the quarter ended December.
Maytas Infra Ltd. (MAY IN) dropped 6.45 rupees, or 5 percent, to 122.90, extending a five-day 23 percent decline. The real estate company controlled by the family of Ramalinga Raju, the former chairman of Satyam Computer Services Ltd. (SCS IN), is in talks with two companies to sell stakes in projects it can’t afford to complete, the Economic Times reported, citing an unidentified executive at one of the companies approached by Maytas.
Satyam Computer Services Ltd. (SCS IN) dropped 9.55 rupees, or 32 percent, to 20.30, its lowest since July 1998. India is unlikely to bail out Satyam as it will set a bad precedent, the Economic Times reported, citing a person in the Prime Minister’s office it didn’t identify.
Supreme Industries Ltd. (SI IN) declined 2.75 rupees, or 2.4 percent, to 110. The Indian maker of plastic products posted a second-quarter loss of 14.9 million rupees, compared with a profit of 130.7 million rupees a year earlier, the Mumbai-based company said.
Unitech Ltd. (UT IN) dropped 3.25 rupees, or 9.3 percent, to 31.70, its lowest since Dec. 5. India’s second biggest developer fell after its credit rating was cut to non-investment grade by Fitch Ratings on uncertainty over its ability to repay debt.
To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net
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