Heavy selling swept through the Indian equities markets on Monday after crude oil spiked higher, driving fears among institutional money managers that corporate profits for the 2008 fiscal year will be eaten way. Market bulls not already on the ropes from a hot inflation number reported on Friday are becoming increasingly concerned that an interest rate hike is inevitable and that crude oil is destined to hit $150 a barrel.
"Until oil prices start falling and global conditions improve, markets will continue to be under pressure," said Mihir Vora, who is head of equities at HSBC Asset Management.
U.S.-based investment banking giant Morgan Stanley (MS) cut its December 2008 fair value target for India's Sensitive Index by 9% to 13,224, vs. its previous target of 14,450 set in April. In a note to clients, Morgan analyst Ridham Desai said: "The turmoil in global financial markets, coupled with the slowing of growth and resurgence of inflation, has shaken our confidence."
The Bombay Stock Exchange's Sensex Index fell 277.97 points, or 1.9%, to 14,293.32. Here's a look at how some India-based American depositary shares traded in the U.S. on Monday.According to CNet.com, Indian information technology major Infosys (INFY - Get Report) has developed holographic mobile phones that will be able to project, capture and send 3D images for applications such as 3D films, games, medical scans and education aids. The company said it plans to release the devices by 2010. "Holographic handsets have the capability of enriching the user experience, with an actual 3D experience and higher-quality images. This gives users a more realistic experience in areas like gaming, medicine, movies etc," said an Infosys company representative. American depositary shares of Infosys, which trade on the Nasdaq, traded up 1.5% to $45.