A trader smiles while working at a stock brokerage in Mumbai. (Photographer: Adeel Halim/Bloomberg News)

India Sensex Snaps Three Sessions of Gains on Liquidity Concerns

(Bloomberg) -- India stocks fell as concern resurfaced over tight liquidity impacting the financial sector, adding to worries about surging oil prices and global trade conflicts.

The benchmark S&P BSE Sensex index fell 1.1 percent to 34,779.58 in Mumbai, snapping three straight sessions of gains. It had climbed as much as 1.3 percent earlier in the session.

Seventeen of 19 sector sub-gauges compiled by BSE Ltd. declined, led by realty and auto companies. Yes Bank Ltd. and Adani Ports and Special Economic Zone were the worst performers on the gauge. Infosys Ltd. climbed to a one-week high after posting quarterly net income that topped analysts’ estimates.

Indiabulls Housing Finance Ltd. plunged 13 percent, leading a decline in financial stocks, on concern about its exposure to a private real estate player whose credit facilities have been downgraded to default.

“The stock is reacting to market reports of Indiabulls’ exposure to realty developer Supertech Ltd., which saw a credit rating downgrade following a slowdown in cash flow and payment delays,” said Deepak Kumar, an analyst at Narnolia Securities Ltd. “Investors are worried the stress in the real estate sector can deteriorate the asset quality of these lenders”

Supertech long term fund-based facilities was cut to D from BB- at Brickwork last week. Indiabulls’ Housing may have loaned more than 5b rupees to Supertech, BloombergQuint reported Wednesday, citing a Macquarie note to clients. Indiabulls Housing didn’t immediately respond to an email from Bloomberg

India’s quarterly earnings season has started on a positive note. Net income at four of the seven NSE Nifty 50 Index companies that have reported so far have met or beaten estimates, data compiled by Bloomberg show. Brent prices climbed for a fourth session, rising to $81.71 a barrel.

©2018 Bloomberg L.P.