Indian shares end lower on sustained selling in techs

Friday, 23 May 2003, 07:00 Hrs
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MUMBAI: India's blue-chip share market index finished in the negative zone for the second consecutive session Thursday on sustained selling pressure on technology counters on earning growth concerns.

The stock market benchmark 30-share Bombay Stock Exchange sensitive index or Sensex closed at 3,040.79, a loss of 16.30 points or 0.53 percent from its previous session's close.

India's blue-chip technology shares have come under severe selling pressure in the last few sessions on fears that the rising rupee would inflict more pains to the high-profile technology industry.

The rupee closed mildly higher at 46.90 a dollar Thursday, as compared to its two-year high of 46.90/91 on Wednesday.

Analysts say the unabated rise in the value of the Indian rupee against the U.S. dollar will badly pinch the earnings of the export-oriented Indian software makers in the current fiscal year.

"Earnings of top software companies will definitely be pressured by the rupee's strength in the current fiscal year," said a fund manager with a New Delhi-based brokerage firm.

"Most of the top Indian software makers on an average earn 70 percent of their annual revenue from the U.S. So, the sharp rise in the value of rupee will badly hit their export earnings," the fund manager told IANS.

The National Association of Software and Service Companies (Nasscom), India's premier IT industry umbrella group, admitted that the rising value of the rupee would have an impact on growth of Indian IT industry this year.

India's IT exports, including software development and services businesses, are estimated to have grown nearly 26 percent in the year ended Mach 31, 2003, down from a projected 30 percent growth due to the rupee appreciation.

According to analysts, the rupee is still undervalued, despite a sharp four percent appreciation in the rupee from the end of May 2002.

In the technology sector, HCL Technologies, a New Delhi-based software development and services company, lost 4.7 percent to touch 122.75 and Infosys Technologies, India's largest listed software exporter, ended 3.5 percent lower at 2,689.05.

Hyderabad-based Satyam Computer fell 3.5 percent to 160.10 on institutional selling pressure.

In the old economy sector, ICICI Bank, one of the fastest growing private sector banks, lost 5.9 percent to touch 131.15 and Hero Honda Motors, the largest motorcycle makers, ended 4.8 percent lower at 222.75.

Tobacco giant ITC fell 1.7 percent to 693.55 and consumer goods giant Hindustan Lever closed with a loss of 0.7 percent at 147.

Buying interest, on the other hand, was witnessed on counters such as GlaxoSmithKline, Tata Steel, Tata Engineering, Reliance Industries, State Bank of India, Larsen and Toubro, and Grasim Industries.
Source: IANS
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