Worries over a prolonged global economic slowdown sent Indian shares to their 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 percent, or 169.34 points, at 17,940.55, its lowest close since June 23. Twenty of its components fell. The 50-share NSE index fell 0.95 percent to 5,404.80 points. In the broader NSE market, 903 losers led 524 gainers on total volume of about 573 million shares. India's top software services exporter Tata Consultancy Services shed 1.8 percent, while smaller rivals Infosys and Wipro fell 0.67 percent and 0.6 percent 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 percent, 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 percent after it reported a bigger-than-expected 28 percent 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 percent to 215.20 rupees a day after the leading listed real estate developer posted a 12 percent 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. Indian engineering and construction firm Larsen & Toubro dropped 4.3 percent 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 percent respectively.