Indian shares fell 1.6% to their lowest close in two weeks on Tuesday, with export-driven Tata Consultancy Services sliding the most in more than two years over uncertain global economic outlook.
Concerns foreign funds could pull out more from India, which has been one of the world’s worst performing markets this year, also weighed.
The 30-share BSE index ended down 276.80 points (1.63%) at 16,748.29, its biggest drop since October 4. Twenty-six of its components declined.
The benchmark, which had risen 5.2% last week in a bounce back, is down about 17%so far this year.
The 50-share NSE index shed 1.58% to 5,037.50. In the broader market, there were 2.8 losers for every gainer on total volume of about 450 million shares.
Traders said investor sentiment was dented by comments from the German finance minister against a quick-fix to Europe’s debt problems, slowing growth in China and a warning on France’s sovereign credit rating.
There is a significant impact from the way things are unfolding globally. The worries that the worst may not be over is certainly affecting sentiment, said Kishore P Ostwal, managing director, CNI Research said.
Software services companies that get most of their revenue from exports led the fall.
Tata Consultancy (TCS), India’s biggest software services exporter, fell 7.7%to R1,033.55 a day after the company reported lower-than-expected quarterly earnings and said the outlook for pricing was tough.
It was the steepest one-day slide since May 19, 2009 when it had slumped 10%.
Rivals Infosys and Wipro shed 1.6 and 3% respectively.
Ostwal said investors were also wary after monthly derivatives contracts expiry was brought forward by two days to October 25 due to holidays.
Shares in HCL Technologies fell 8.75% as investors shrugged off a 50% jump quarterly profit and focused on a cloudy outlook for the sector amid slowing global growth. Banking shares fell on worries over rising interest rates. SBI dropped 1.3% while ICICI Bank fell 2.5%.
World stocks as measured by MSCI fell nearly 1%, while the emerging equities index was down 2.3 percent.
US stocks opened little changed on Tuesday after Moody’s said it would review France’s credit rating.The Dow Jones industrial average dropped 49.65 points to 11,347.35.