India’s Sensex Declines to One-Week Low, Financials Lead Drop
Indian Equities Advance After Federal Reserve Pledges Support
(Bloomberg) -- India’s benchmark equity index declined as rising local and global cases of coronavirus sapped investor sentiment.
The S&P BSE Sensex fell 0.9% to 37,736.07, its lowest close since July 20. It rose by a similar magnitude earlier in the day, as the Federal Reserve’s pledge for continued economic support boosted appetite for risk-taking. The NSE Nifty 50 Index also slid 0.9%. The 30-stock Sensex has surged more than 45% from its March low, even as India has the third-most coronavirus cases globally. The rebound has some technical indicators signaling that the stock rally is overdone for an economy facing its first annual contraction in over four decades.
“We are cautious on the market,” Edelweiss Financial Services Ltd.’s analysts including Aditya Narain wrote in a note, citing recovery prospects, risks and valuations. “Your portfolio should not wait for the Covid-19 count to fall,” they wrote.
The number of confirmed coronavirus cases in India stands at 1.53 million, according to data collected by Johns Hopkins University and Bloomberg News. A total of 34,193 people have died of Covid-19, while 988,029 have recovered.
Seventeen of 25 Nifty 50 companies that have reported June-quarter results so far have either beaten or met analyst estimates for profits, according to data compiled by Bloomberg.
The rupee weakened 0.1% to 74.85 per U.S. dollar, while the yield on the 10-year benchmark government bonds fell one basis point to 5.83%.
The Numbers
- Sixteen of 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of telecom stocks
- Housing Development Finance Corp Ltd. slid 3.6% to contribute the most to the Sensex’s decline, while IndusInd Bank Ltd. had the largest drop, falling 5.6%
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