Mumbai, Sept 16 : Shares of top outsourcing firms, which earn a key part of their revenues from the U.S. banking and financial services sector, continued to fall sharply on Tuesday.
Nifty, the benchmark of the National Stock Exchange (NSE), fell by 102 points to 3970.80, a slump of 2.51 per cent. And the Bombay Stock Exchange (BSE) benchmark Sensex slumped to 13,058 from Monday's close, shedding 472.81 points. Crude oil prices plunged to a seven-month low of less than 100 dollars a barrel due to gloom in U.S. financial services, which heightened concerns that energy demand may slow down.
Cutting across sectors Indian stocks went into a tailspin, witnessing another strong round of selling this morning. Realty stocks have taken a beating once again, going down by gone down by 4.86 per cent this morning. Metal, capital goods, power, PSU and IT stocks have also declined sharply.
Meanwhile, the rupee continued to lose out against the US currency and declined further, crossing the 46 mark to a dollar today.
Experts are terming these jitters a result of the overall market. The news that US finance major Lehman Brothers filed for bankruptcy protection and the precarious health of other companies weighed heavily on the market trends. Many small investors feel that the trend is here to stay for at least a couple of days and things might improve next week.
"I think for another day or two, the situation would be bad and the markets would be on a downward trend. This is all because of the foreign markets and the worries there and then, now this Lehman Brothers bankruptcy. See, the Indian scenario is positive, gold is falling, crude is falling, property front is also good. People will come back," said Kailash Nath, an investor.
Many felt that this slump can prove to be a good investment opportunity for those who are looking at a long-term perspective.
Software firms, which have already been floundering on worries of the dollar's rise against the euro and pound could impact revenue growth, have been tapping segments such as manufacturing, retail and aviation to cut their dependence on the financial services sector, which has been battered by the sub-prime crisis.
The impact of the credit crisis has been particularly acute in the United States, which accounts for more than half the revenue of the country's top outsourcing firms.
Experts say that the problem is that there is hardly any improvement seen in the U.S. economy; on the contrary, the flow of negative news has increased.