MUMBAI (Reuters) - Nifty fell for the third session in four, led by technology outsourcing stocks such as Infosys after local media reported the United States raised the cost of employment visas, sparking worries about the outlook in a key market for the sector.
Indian stocks have remained under pressure through the week, with analysts citing the uncertainty behind taxation of foreign investors as a main factor, though so far they have net sold only about $39 million worth this week as of Wednesday, according to provisional data.
Traders expect volatility on Friday ahead of the end of the 2011/12 fiscal year, which may lead to squaring of positions by institutional investors.
(To read: Expect markets to correct even if RBI cuts rate, says BofA here)
“This remains a sell on rises market, as the main trend still remains down,” said CK Narayan, who runs financial advisory firm Growth Avenues Asset Advisors.
The main 30-share Bombay Stock Exchange Sensex lost 0.37 percent to 17,058.61, after hitting a two-month intraday low during the session.
The 50-share Nifty 0.31 percent at 5,178.85.
Among leading decliners, India’s technology outsourcing companies fell on local media reports the United States had raised the cost of processing H-1B employment visas, which is widely used by domestic companies.
The higher costs could hit profit margins at India’s $100 billion technology, and raised concerns the industry could be further targeted by the United States.
Government-owned capital goods maker BHEL (BHEL.NS) fell 1.35 percent after Minister for Heavy Industries & Public Enterprises Praful Patel advised BHEL to explore possibilities of diversification into other sectors.
Portfolio positioning and profit-booking also hit some outperformers ahead of the end of the quarter and the fiscal year on Friday.
Larsen and Toubro (LART.NS) fell 2.1 percent, after surging 31.5 percent this quarter as of Wednesday’s close, compared with about a 12 percent gain in the Nifty index.
Trades attributed the falls to a report from The Financial Express, quoting a Department of Telecom official as saying it was considering a combined 10 billion rupees in fines for the industry for violations of 3G license conditions.
Reporting by Abhishek Vishnoi; Editing by Rafael Nam