Mkts crash, Sensex closes 456 pts down

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Sensex closes over 200 pts in redIT stocks in green amid weak rupeeMarkets flat, Sensex ends up 66 pointsSensex up over 300 pts on rate cut hopes

New Delhi, July 11:: Indian shares fell 3.3 per cent on Friday, led by export-focused software services companies after bellwether Infosys warned of challenging times ahead and data showed a sharp slowdown in industrial output.

The main index just managed to notch a tiny gain on the week, after falling for seven weeks in a row, but traders said the market would be under pressure until there was clear evidence of political stability.

Shares in Infosys tumbled 7.2 per cent to 1,676.45 rupees, their biggest single-day slide in more than four years, after the No. 2 outsourcing firm raised its full-year revenue forecast in the local currency but kept it unchanged in dollars.

Rajesh Agarwal, director of research at CDEquisearch, said investors were disappointed as the upgrade was solely based on a weakening rupee, and it faced tough conditions in its key US market.

"The environment continues to be challenging. We are seeing bad news coming out of banking and retail," Infosys Chief Operating Officer S.D. Shibulal said, adding that IT spending was "flat or marginally decreasing".

"There are delays in decision making."

The main 30-share BSE index ended down 3.28 per cent, or 456.39 points, to 13,469.85, with 25 components declining.

It rose 0.1 per cent on the week but is now down more than a third in 2008.

Sentiment was also rattled by industrial data that showed May output grew at its slowest pace in six years, while a jump in inflation to nearly 12 per cent dashed any hopes that weakening growth could persuade the central bank to hold off interest rate rises.

In the broader market, 1,652 losers were ahead of 995 gainers on volume of 331.9 million shares.

Agarwal said the market would be under pressure next until the government got past a trust vote in parliament, following the withdrawal of its left allies this week in protest against a civilian nuclear with the United States.

Prime Minister Manmohan Singh has said he would seek a vote of confidence in parliament and the government hopes to romp home with the support of a regional party and others.

"There will be pressure till the government passes the trust vote. In politics and cricket, you never know till the last over," Agarwal said.

Leading software exporter Tata Consultancy fell 8 per cent to 799.20 rupees, while smaller rivals Wipro fell 4.3 per cent to 412.30 rupees and Satyam lost 7.2 per cent to 444.45 rupees.