India Stocks Drop to Lowest in 3 Months; ICICI Leads Declines

Feb. 24 (Bloomberg) -- Indian stocks fell to a three-month low, led by Infosys Technologies Ltd. and other software exporters on concern that a deepening recession in the U.S. will erode earnings from their biggest export market.

Infosys Technologies, the nation’s second-biggest software exporter, slid 1.7 percent. ICICI Bank Ltd., the nation’s second-largest lender, dropped 3.8 percent to a three-month low. Tata Steel Ltd. led makers of the alloy lower after UBS AG said producers had overestimated demand.

“No one has a handle on how bad things are in the U.S.,” said Kenneth Andrade, head of investments at IDFC Asset Management Co. and oversees assets worth $1.8 billion. “To kick-off credit, the government will need to nationalize the liabilities side of the business at banks.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 180.47, or 2 percent, to 8,662.74 as of 10:12 a.m. local time, a level not reached since Nov. 20. The S&P CNX Nifty Index on the National Stock Exchange declined 1.7 percent to 2,689.65. The BSE 200 Index retreated 2 percent to 1,023.17. S&P CNX Nifty futures for February delivery dropped 1.5 percent to 2,682.

Infosys fell 1.7 percent to 1,157.10 rupees. Wipro Ltd., India’s third-largest provider of software services, dropped 2.4 percent to 210.15 rupees. The U.S. accounts for more than half the revenue of software developers.

ICICI, State Bank

ICICI Bank, the nation’s second-largest lender, dropped 3.8 percent to 323 rupees. State Bank of India, the No. 1, slid 1.8 percent to 1,018.20 rupees, its worst in almost a year.

In the U.S., Standard & Poor’s 500 Index dropped 3.5 percent yesterday to the lowest level since April 1997. U.S. regulators said they will begin examining which banks have enough capital to survive a deeper recession.

Tata Steel slid 4.6 percent to 160.40 rupees, leading makers of the alloy lower after UBS AG said producers had overestimated demand. The report said global steelmakers have raised output too quickly in response to a bounce in Chinese demand. Steel Authority of India Ltd., the No. 2 producer, fell 4.2 percent to 76.20 rupees.

Overseas investors sold a net 3.2 billion rupees ($64 million) of Indian stocks on Feb. 19, according to the nation’s market regulator.

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

Sugar Producers: India, the world’s second-biggest sugar producer, plans to announce stock limits on the commodity to curb prices, Home Minister Palaniappan Chidambaram said after a cabinet meeting in New Delhi late yesterday.

Bajaj Hindusthan Ltd. (BJH IN), India’s biggest sugar producer, dropped 7.9 percent to 45.9 rupees. Balrampur Chini Mills Ltd. (BRCM IN), India’s second biggest, fell 7.5 percent to 49 rupees. Shree Renuka Sugars Ltd. (SHRS IN), India’s biggest sugar refiner, declined 6.7 percent to 76.95 rupees.

Satyam Computer Services Ltd. (SCS IN) fell 3.3 percent to 44.05 rupees. The Indian software provider at the center of the nation’s biggest corporate fraud inquiry will seek approval from regulators next week for its plan to sell a stake to a strategic investor. The company said it won orders worth $250 million in the last seven weeks.

Sobha Developers Ltd. (SOBHA IN) retreated 1.9 percent to 79.05 rupees. The Indian real estate developer had its stock rating downgraded to “underweight” from “equal-weight” and had its price target cut 79 percent at Morgan Stanley, citing weak demand.

Tata Power Ltd. (TPWR IN) declined 1.7 percent to 725.5 rupees. India’s biggest electricity generator outside state control may not bid for projects that can generate 4,000 megawatts of electricity. Raising funds in the current situation is difficult, said Banmali Agrawala, executive director.

UltraTech Cement Ltd. (UTCEM IN) slid 1.5 percent to 410.55 rupees. India’s second-biggest producer of the material had its rating raised to “equal-weight” from “underweight” at Morgan Stanley.