India’s Sensex Pares Weekly Advance as Software Shares Retreat

  • Infosys, TCS drop as increase in U.S. visa fees proposed
  • Sensex completes first weekly advance in 3 after Fed decision

India’s benchmark equity index fell for the first time this week, led by software exporters, as Asian stocks retreated after a bout of optimism that followed the Federal Reserve’s first interest-rate increase in almost a decade faded.

Tata Consultancy Services Ltd. and Infosys Ltd., the nation’s biggest software companies, dropped after a U.S. bill proposed higher fees for worker visas. Bajaj Auto Ltd., a motorcycle maker, retreated from a seven-week high. Vedanta Ltd., the largest copper producer, declined the most on the S&P BSE Sensex index.

The Sensex tumbled 1.1 percent to 25,519.22 at the close in Mumbai, paring the first weekly gain in three weeks to 1.9 percent. Stocks capped a fourth day of advances on Thursday after the Fed cleared months of uncertainty by raising borrowing costs and signaling that any further moves will be gradual. Foreigners have sold $564 million of stocks in December, poised for a fourth monthly withdrawal in five months, data compiled by Bloomberg show. The MSCI Asia Pacific Index declined 0.7 percent.

“We have seen a large string of outflows for the past few months,” David Pezarkar, the Mumbai-based chief investment officer for equities at BOI AXA Investment Managers Pvt., which has about $433 million in assets, said in an interview with Bloomberg TV India Friday. “That might continue for some more time.”

Visa Fees

Friday’s decline also comes as investor concern grew over the passage of the goods-and-services tax bill in parliament. An Indian government official Wednesday ruled out a last-minute agreement with the opposition on a proposed national sales tax, dealing a blow to Prime Minister Narendra Modi’s reform agenda.

Tata Consultancy Services slid 0.9 percent, the most since Dec. 4, while Infosys halted a six-day, 7.7 percent rally. The S&P BSE Information Technology index declined for the first time in seven days amid concern companies in the U.S. relying on highly skilled foreign workers will have to pay more for their visas. The proposal will cost employers $4.2 billion over 10 years, Bloomberg Intelligence analyst Caitlin Webber said, citing the U.S. Congressional Budget Office.

Modi said in a Twitter post Thursday that he’s shared his concerns over the proposed legislation with President Barack Obama during a phone call between the two leaders. Under the proposal, the supplemental H-1B visa costs could jump to $4,000 from a $2,000 fee put in place in 2010.

Bajaj Auto plunged 2.4 percent, the most in a week, while Vedanta tumbled 3.3 percent, taking this year’s fall to 61 percent. Reliance Industries Ltd., owner of the world’s largest refining complex, declined 1.8 percent from its highest level since July 28.

International investors sold $59 million of local stocks on Dec. 16, paring this year’s inflows to $2.7 billion. The Sensex has fallen 7.2 percent this year and trades at 15 times projected 12-month earnings, compared with a multiple of 11.1 for the MSCI Emerging Markets Index.

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