ndian Stocks Drop Most in Two Months, Led by Banks, Infosys

By Pooja Thakur

Sept. 29 (Bloomberg) -- Indian stocks fell, with the benchmark index declining the most in two months, after efforts to shore up paralyzed credit markets failed to assuage concerns that the global economy will slip into recession.

Lenders led declines, with ICICI Bank Ltd. dropping 12 percent to its lowest in more than two years, after Fortis received a $16 billion bailout, Bradford & Bingley Plc was nationalized and concern grew that a U.S. rescue plan will fail to prevent more bank collapses. State Bank of India fell 2.1 percent, the lowest in a month.

``The U.S. bailout package, even if it comes through, is not going to act as a magic wand and solve all problems,'' said Ajay Bodke, who helps manage the equivalent of $872 million of stocks at IDFC Mutual Fund in Mumbai. ``The details of how they will utilize the money in the package will be important to see.''

The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 506.43, or 3.9 percent, to 12,595.75, the most since July 29. All but one of the 30 stocks in the benchmark declined.

The S&P CNX Nifty Index on the National Stock Exchange slid 135.20, or 3.4 percent, to 3,850.05. The BSE 200 Index declined 4 percent to 1,527.24. Nifty futures for October delivery fell 2.8 percent to 3,888.

ICICI, the second-biggest lender, declined to 493.30 rupees, the lowest since July 21, 2006. State Bank, the nation's largest lender, slid to 1,405.45 rupees, the lowest since Aug. 29. HDFC Bank Ltd., the No. 3, fell 3.6 percent to 1,200.35 rupees, the lowest since Sept. 17.

Software Companies

Tata Consultancy Services Ltd. led software exporters lower on concern the collapse of their financial services clients will hurt revenue and profits.

India's largest software exporter, Tata Consultancy, dropped 8.3 percent to 620 rupees, the lowest since July 14, 2005. Satyam Computer Services Ltd., the fourth-largest software services provider, fell 9.1 percent to 293.05 rupees, the lowest since June 14, 2006.

European governments agreed to invest in Belgium's Fortis and the U.K. seized Bradford & Bingley. Futures on the U.S. Standard & Poor's 500 Index declined 1.2 percent today. President George W. Bush and congressional leaders said yesterday they reached an agreement on a $700 billion bank-rescue package.

``Investors have been pulling out money as they turn increasingly risk-averse,'' said Bodke at IDFC.

The rupee slumped to a five-year low as stock declines spurred fund outflows. Overseas investors sold a net 7.04 billion rupees ($151 million) of Indian stocks Sept. 25, increasing their net outflow this year from equities to $9 billion, the nation's market regulator said.

The rupee fell to as much as 47.115 per dollar, the lowest since June 2003, before closing trading at 46.985 in Mumbai.

The following were among the most active stocks traded on the Bombay and National Stock Exchanges. Stock symbols are in parentheses after company names:

Aztecsoft Ltd. (AZTEC IN) added 8.05 rupees, or 18 percent, to 53.20, the most since Dec. 7, 2007. MindTree Consulting Ltd. (MTCL IN) the Indian computer-services provider that is buying a controlling stake in Aztecsoft offered 2 shares of MindTree for every 11 shares held by Aztecsoft shareholders, MindTree said in a statement to the Bombay stock exchange. MindTree added 4.05 rupees, or 1.3 percent, to 314.40.

HCL Technologies Ltd. (HCLT IN) dropped 17.50 rupees, or 8.2 percent, to 195.40, the most since March 17. The Indian software- services provider controlled by billionaire Shiv Nadar Sept. 26 offered to buy U.K. software consultant Axon Group Plc for about 441 million pounds ($814 million) in cash, trumping a bid by Infosys (INFO IN). HCL is offering 650 pence a share, more than the 600 pence offered by Infosys, HCL said on Sept. 26. Infosys slid 53.60 rupees, or 3.7 percent, to 1,393.30, its lowest since March 24.

Hindalco Industries Ltd. (HNDL IN) slid 2.65 rupees, or 2.7 percent, to 96.70, the lowest since June 16, 2005. The Aditya Birla group may acquire half the stock on sale in group company Hindalco's rights offer by buying the unsold shares, it has told the Securities and Exchange Board of India, the Mint newspaper reported, without saying where it got the information. The founders own 31.43 percent of Hindalco, according to the paper.

The 50.50 billion rupee rights offer, which closes Oct. 10, is priced at 96 rupees apiece, Hindalco said in August.

Suzlon Energy Ltd. (SUEL IN) dropped 21.75 rupees, or 12 percent, to 153.50, the lowest since Nov. 25, 2005. India's biggest wind-turbine maker approved a rights offer of shares to raise as much as 18 billion rupees to help complete the acquisition of an additional stake in Repower Systems AG.

Tata Motors Ltd. (TTMT IN) declined 19.95 rupees, or 5.3 percent, to 354.60, the lowest since Nov. 14, 2003. India's largest truck maker, which is making the world's cheapest car, may face farmer protests in the northern Indian state of Uttarkhand if the government gives additional land for the planned Nano car project, the Press Trust of India reported on Sept. 26, citing Hanif Gandhi, a member of Kisan Kisani Abhiyaan group that is planning to protest against the provincial government's plan.

To contact the reporters on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net.

Last Updated: September 29, 2008 08:07 EDT