Indian stocks continued to drop dramatically Thursday, following a negative session on Wall Street the previous day. Investors are selling first and asking questions later as emerging markets continue to spiral to the downside across all of Asia.
Market players in the region are worried that inflation data could come in hot on Friday and political instability could arise surrounding the U.S.-India nuclear energy accord. The Communist Party of India said it will continue to oppose the nuclear agreement with the U.S., which has been stalled since 2005.
"Negative global cues coupled with inflation concerns and political uncertainty is a dangerous concoction for a market where sentiment is already weak. There is no clarity as to which way the market is headed, and given the scenario, traders chose to sell. I advise people to stay where they are until a clear trend emerges," said Hitesh Sheth of Prabhudas Lilladher.
The Bombay Stock Exchange's Sensex Index lost 334.32 points, or 2.2%, to 15,051.66. Here's a look at how some India-based American depositary shares traded in the U.S. on Thursday.Indian banking ADRs came under selling pressure Thursday after U.S.-based bank Citigroup (C) said it could take substantial writedowns in the second-quarter for subprime mortgages and other assets. American depositary shares of Icici Bank (IBN), which trade on the NYSE, fell 2% to $35.57, and ADR shares of HDFC Bank (HDB), which also trade on the NYSE, dropped around 1% to $83.46. Susquehanna Financial reiterated its positive rating on Cognizant Technology (CTSH), a U.S.-based information technology company with large exposure to the Indian market, and raised its price target from $36 to $41. In a note to clients, the firm said Cognizant is likely to have been one of three vendors picked for the technology integration of JPMorgan (JPM) and Bear Stearns. Susquehanna also said the firm might have won a large contract from a large health-care provider located in New York. Shares of Cognizant rose 2.7% to $36.71.