Indian Stocks Slump With Rupee and Bonds Amid Broad Asia Selloff
Indian two thousand rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer Dhiraj Singh/Bloomberg)

Indian Stocks Slump With Rupee and Bonds Amid Broad Asia Selloff

Indian stocks plunged along with markets across Asia amid a global selloff in risk assets sparked by the surging U.S yields.

The S&P BSE Sensex fell 3.8% to 49,099.99 in Mumbai, its biggest decline since early May. The NSE Nifty 50 Index also slipped by a similar magnitude on Friday.

The Indian rupee declined 1.4% Friday, the biggest drop since March, to 73.4650 per dollar, while benchmark 10-year bonds were poised for the biggest monthly loss in almost three years, with yields having climbed by 32 basis points.

“Panic in global bond markets led to sharp rise in yields which spooked investors amid fears of interest rate cycle reversal,” said Hemang Jani, head of equity strategy at Motilal Oswal Financial Services. “The market correction might continue for some time till inflation fears ease.

Data due later Friday will probably show India’s gross domestic product expanded 0.6% in the three months ended December, after contracting for two consecutive quarters, according to the median forecast in a Bloomberg survey of economists.

Foreign investors have pulled out $157.4 million from local stocks this week through Wednesday, even though for the month it recorded a net inflow of $3.9 billion.

All 19 sector sub-indexes compiled by BSE Ltd. were trading in the red, led by a gauge of lenders. HDFC Bank Ltd. with a 2.5% drop, was the biggest drag on the Sensex. All 30 stocks on the benchmark gauge were in the red.

DECLINERS

  • Mahindra & Mahindra Ltd. (MM) -6.6%
  • Oil & Natural Gas Corp Ltd. (ONGC) -6.6%
  • Power Grid Corp of India Ltd. (PWGR) -6.5%

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