Key Indexes Cap a Second Week of Losses as Indian Stocks Decline
India's Sensex Extends Slide to Third Day Amid Cash-Crunch Woes
(Bloomberg) -- Indian equities dropped, dragging local indexes to a second week of losses, as investors wait to see any government plans to bolster a slowing economy and arrest a liquidity crunch.
The benchmark S&P BSE Sensex retreated 0.7% to 39,452.07 at the 3:30 p.m. close in Mumbai, capping a second straight week of declines. The NSE Nifty 50 Index fell 0.8% to 11,823.30.
A rally of nearly 9% in India’s key equity indexes this year has prompted some investors to ponder whether the gains are too steep, too soon. India’s economy is slowing, while a cash shortage has triggered debt repayment defaults or delays among some local companies. With a parliamentary session due to begin next week, investors are waiting for policies from Prime Minister Narendra Modi’s second-term to spur growth and increase liquidity.
Strategist View
- “Key challenges for the markets would be news flow on oil, U.S. plan on tariffs and India’s budget plans on how to stimulate investments ahead,” said Avinash Gorakshakar, head of research at Mumbai-based Joindre Capital Services Ltd. “Valuations look expensive, but any correction and stock-specific approach should help investors in making some buy calls,” he said.
The Numbers
- Eighteen of the 19 sector indexes compiled by BSE Ltd. fell, led by a gauge of property stocks. Seven of these measures dropped at least 1%.
- Twenty-six of the 31 Sensex members and 39 of the 50 Nifty stocks declined.
- IndusInd Bank Ltd.’s 4.2% drop was the steepest among Sensex members, extending Thursday’s loss after UBS AG cut its rating on the shares to sell.
- Gruh Finance Ltd. slid 5% after parent Housing Development Finance Corp. sold 4.2% of its stake in the company.
Analyst Notes/Market-Related Stories
- India Credit Slowdown Is Set to Reverse on Liquidity: Economics
- Modi’s Suspect GDP Numbers Have Done Real Damage: Andy Mukherjee
- India’s Sebi Issues New Disclosure Rules for Credit Rating Cos
To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Kurt Schussler
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