Indian shares fall as TCS drags tech stocks; rupee hits fresh low
Indian shares fell on Monday, as IT services major Tata Consultancy Services dragged down technology companies after posting weak results last week, while the rupee hit another record low.
The NSE Nifty 50 index .NSEI was down 0.30% at 16,172, as of 0447 GMT, while the S&P BSE Sensex .BSESN fell 0.36% to 54,284.71, Reuters reports.
Shares of TCS TCS.NS fell as much as 4.6% to hit a three-week low, after it missed quarterly profit estimates by a wide margin on Friday, as employee-related expenses soared. The index heavyweight also pulled down tech index .NIFTYIT by 3.1%.
“For IT, the results are disappointing. Market had this view already over higher attrition and fear of recession and that’s why stocks have been correcting. After some stability the stocks have started to correct again,” said AK Prabhakar, head of research, IDBI Capital Market.
Expenses for TCS jumped, while margins eroded with the order book remaining nearly flat year-on-year.
Bucking the trend, D-Mart owner Avenue Supermarts AVEU.NS jumped 3.7%, after reporting strong quarterly results.
“D-Mart has given out very good results and their margin has also expanded. The results should be reflective for other retail and consumer facing companies,” Prabhakar said.
The Indian rupee weakened to a an all-time low against the U.S. dollar INR=IN amid weaker domestic equities and concerns about global economic growth supporting the safe-haven greenback.
Focus in now on India’s retail inflation data, due later this week, with a Reuters poll showing that the reading likely held steady in June but well above the Reserve Bank of India’s tolerance limit for a sixth month.
Broader Asian shares were mostly under water on Monday, as investors braced for a U.S. inflation report that could force another super-sized hike in interest rates, and the start of an earnings season.