Indian shares dropped nearly one percent on Monday as technology shares fell on jitters ahead of quarterly earnings and expectations of a cautious outlook from sector bellwether Infosys Technologies.
The rupee ended marginally weaker, giving up early gains as the central bank stepped up dollar purchases. Bonds rallied with cash surpluses expected to rise further on the back of increased intervention by the central bank in the currency market.
The 30-issue Bombay share index fell 0.94 percent to 5,783.79 points, its lowest close since April 1. Prior to Monday, it had risen about nine percent over three weeks to a one-month closing high last Thursday. The market was closed on Friday.
Infosys, the nation's second-biggest software services exporter, led the way down with a 3.3 percent drop to 5,139.85 rupees on worries it could give cautious guidance on Tuesday due to a rising rupee.
Along with its earnings on Tuesday, the Infosys board will also consider a bonus issue or a stock split.
"A lot will depend on what Infosys says, but the fact that even the bonus news has failed to prop up sentiment says a lot about the stock's outlook," said Arun Kejriwal, a director with independent research house KRIS. A Reuters poll last week forecast Infosys would report a 35 percent rise in fourth quarter net profit to 3.5 billion rupees.
Wipro Ltd, the nation's No 3 software services exporter, fell 0.9 percent to 1,452 rupees.
Among regular government bonds, the key 10-year 7.37 percent 2014 federal bond ended at 5.0792 percent compared with 5.1072 percent in the previous session.
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