India's Sensex Set for Two-Week Low; Infosys, TCS Lead Declines
July 12 (Bloomberg) -- India's benchmark stock index fell to a two-week low amid concern Europe's debt crisis will worsen and as Infosys Ltd.'s sales forecast missed analysts estimates.
Infosys, the nation's second-largest software maker, sank 5.5 percent. Sales in the year to March 31 will range from $7.1 billion to $7.3 billion, the company said today. That trailed the $7.5 billion average of 56 analyst estimates compiled by Bloomberg. Tata Consultancy Services Ltd. slid 2.1 percent.
The Bombay Stock Exchange Sensitive Index, or Sensex, lost 167.16, or 0.9 percent, to 18,554.23 at 10:10 a.m. in Mumbai, set for the lowest level since June 28. The S&P CNX Nifty Index shed 0.8 percent to 5,570.15. The BSE 200 Index slid 0.6 percent to 2,298.63.
Infosys, which gets about 22 percent of its sales from Europe, plunged 5.5 percent to 2,761.7 rupees, heading for its lowest close since June 22. Net income increased 16 percent to 17.2 billion rupees in the quarter ended June from 14.9 billion rupees a year earlier. That was in line with the median analyst estimate compiled by Bloomberg.
Tata Consultancy, the biggest software exporter, retreated 2.1 percent to 1,131.9 rupees. Wipro Ltd., No. 3, dropped 2.4 percent to 410.8 rupees.
India's biggest software makers get more than 75 percent of their sales from overseas.
Europe's finance ministers are struggling to contain the region's debt crisis, declining to rule out a temporary default in Greece and reviving the prospect of bond buybacks as investors pounded Italy. The crisis may jeopardize earnings for Indian companies already confronted with rising borrowing costs and signs the global economic recovery is slowing.
Some 33 percent of the companies in the Sensex reported profits that missed analysts' estimates in the March quarter, compared with less than a quarter that did so last year.
Nomura Holdings Inc. said 100 of the 114 companies under its coverage may post an average 4 percent gain in profit for the June quarter. Sales would increase 21.7 percent from a year ago, the brokerage said in a July 8 report.
India's Central Statistical Office will today announce May industrial output figures. Output growth will be 8.5 percent, compared with 6.3 percent in April, according to the median estimate of 27 economists in a Bloomberg News survey.
The Sensex has fallen 8.7 percent this year, the worst performer among Asia's 14 largest markets, as India's central bank raised rates 10 times since the start of 2010 to cool inflation. Companies on the Sensex are valued at 15.1 times estimated earnings, compared with 10.8 for the MSCI Emerging Markets Index.
Overseas funds bought a net 6.76 billion rupees ($152 million) of Indian stocks on July 8, raising total investment in equities this year to 91 billion rupees, according to data on the website of the Securities and Exchange Board of India.
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