India Stocks Decline as U.S. Stimulus Concern Damps Sentiment
(Bloomberg) -- India stocks fell as an elusive U.S. stimulus deal kept sentiment subdued in the region, while investors closely watched local companies’ earnings.
The S&P BSE Sensex fell 1.3% to 40,145.50 in Mumbai, while the NSE Nifty 50 Index declined 1.4%.
“It is predominantly global factors at play here with U.S. futures down and investors also wanting to avoid the U.S. election day uncertainty,” said Kranthi Bathini, an equity strategist at WealthMills Securities Pvt.
Investors remain focused on the chances of agreement on a stimulus package as November’s election fast approaches. Still, concerns are mounting that surging virus cases could force more businesses to close.
At home, economic activity is rebounding, and foreign investors’ net buying of $2.2 billion in local stocks this month is the highest since August. The central bank’s October policy meeting minutes indicated reviving growth is a bigger priority for the newly appointed monetary policy committee than achieving an inflation target.
“Low interest rates and optimism about company sales picking up during the festive season that began this month are positives supporting the stocks,” said Ravi Singhal, an analyst at Jaipur-based GCL Securities Ltd. “High inflation for an extended period of time remains a key risk while the U.S. election-led volatility may weigh on sentiment during the week.”
In company earnings, 10 out of the 18 Nifty 50 companies that have announced results so far have either met or exceeded expectations.
The rupee weakened 0.3% to 73.8475 per U.S. dollar, while the yield on 10-year government bonds was little changed at 5.84%.
- All except one of 19 sector indexes compiled by BSE Ltd. declined, led by a gauge of energy stocks.
- Reliance Industries Ltd. contributed the most to the Sensex drop and fell 4%; Amazon.com Inc. secured relief in its dispute with Future Group after a court put a temporary hold on the debt-strapped Indian conglomerate’s $3.4 billion deal to sell assets to Reliance Industries.
- Bajaj Auto had the largest drop, falling 6.1%.
- IndusInd Bank Ltd. was among the best performers, adding 1.4%; Kotak Mahindra Bank Ltd. is exploring a takeover of the lender, people with knowledge of the matter said. IndusInd denied the report, an external spokesperson said.
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