Indian Stocks Fall as Investors Worry About Government’s Ability to Boost Economy
Indian Stocks Fall as Investors Worry About Government’s Ability to Boost Economy
(Bloomberg) -- Indian stocks completed their longest run of declines in more than a month as the late arrival of monsoon rains, crucial for crop output, heightened investor concern about the government’s ability to bolster a slowing economy.
The S&P BSE Sensex fell 1.3% to 38,960.79 in Mumbai, clocking its steepest four-day slide in five weeks. The NSE Nifty 50 Index also lost 1.3%.
The monsoon accounts for more than 70% of India’s annual rainfall, and farmers of grains, pulses, cotton and sugarcane typically wait for the rains to start before they begin planting. Any deficit in showers during the early part of the season could delay sowing and reduce crops, even if the monsoon gathers pace later.
Finance Minister Nirmala Sitharaman will present her first federal budget to lawmakers on July 5. Investors will be looking for the government’s steps to simulate economic growth that slowed to a five-year low in the January-March quarter.
Strategist View
“Steady and good progress of the monsoon is critical for reviving demand and the economy after a delayed arrival,” said Anita Gandhi, a Mumbai-based director at Arihant Capital Markets Ltd. “Investors will be looking for government measures in the budget to spur demand in sectors like autos and housing, which have been witnessing a slowdown.”
The Numbers
- All 19 sector indexes compiled by BSE Ltd. fell, led by a gauge of metal companies
- Reliance Industries contributed the most to the index decline, decreasing 2.7%, while Tata Steel had the largest drop, falling 5.7%
- Yes Bank provided the biggest boost to the index and had the largest gain, advancing 1%; the lender plans to raise $1.2 billion to boost capital, its CEO said.
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To contact the reporter on this story: Nupur Acharya in Mumbai at nacharya7@bloomberg.net
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Naoto Hosoda
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