India Stocks Plunge Most in Four Months As Overseas Funds Exit
India Stocks Slide as Fed Warning Adds to Economic Gloom
(Bloomberg) -- India stocks slumped by the most since May as foreign investors sold shares at the fastest pace in about three weeks.
The S&P BSE Sensex slid 3%, the most among Asian markets, led by lenders and finance shares. All but two stocks on the NSE Nifty 50 Index ended in the red -- indicating poor market breadth -- as the gauge retreated 2.9%. Volatility was elevated because of the monthly expiry of derivative contracts.
Foreign investors sold a net $241 million worth of Indian stocks so far this week, contributing to a 0.46% decline in the rupee to 73.90 against the U.S. dollar. Meanwhile the yield on the benchmark 10-year government bond was little changed at 5.99%.
While the slump in stocks dragged down every industry, the S&P BSE Bankex, a gauge of bank stocks, fell further than the benchmark index to a three-month low.
“Banks will continue to under-perform in the next couple quarters,” said Amit Khurana, head of research at Dolat Capital Market Pvt. in Mumbai, “Bad loans will go up and they will be more retail and granular, which will be far more difficult to address than corporate loans.”
Here’s what other analysts are saying:
- Arjun Yash Mahajan, head of institutional business at Reliance Securities Ltd. in Mumbai:
- Foreign investors have been sellers for most of this week and the list of IPOs that have hit the market is also sucking out liquidity from the secondary market.
- U.S. elections and other political events in the US will continue to have an impact and act as an overhang.
Abhimanyu Sofat, head of research at IIFL Securities Ltd. in Mumbai:
- We may see a further correction. The U.K. has said they are contemplating a lockdown and fears that more economies may close down are creating nervousness in the market.
- Cyclicals will be hammered further. People have stocked up on defensive stocks, and that pack which has stayed resilient, may also feel the heat.
The Numbers
- All 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of IT companies.
- Hindustan Unilever Ltd. was the sole gainer among 30 stocks that make up the Sensex index
- Infosys Ltd. contributed most to the Sensex decline with a 4.3% drop; IndusInd Bank Ltd. tumbled the most, sinking 7.1%
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