India Stocks Drop as Airwave Sale Shortfall Fans Deficit Concern
Indian stocks dropped for a fifth day, with the benchmark index completing its longest losing streak in six months, after the government failed to meet a fundraising target in a sale of mobile-phone airwaves.
The BSE India Sensitive Index (SENSEX), or Sensex, slid 0.9 percent to 18,454.65, according to preliminary closing prices in Mumbai, its lowest level since Oct. 30. The market was closed yesterday for a public holiday. Infosys Ltd. (INFO), the second-largest software services provider, declined to a three-month low. Tata Motors Ltd. (TTMT), the owner of Jaguar Land Rover, fell for a second day.
India raised 94.08 billion rupees ($1.7 billion) from an auction of second-generation mobile airwaves, the government said yesterday, less than 25 percent of its 400 billion-rupee target. Finance Minister Palaniappan Chidambaram was counting on the sale to help avert a sovereign credit-rating downgrade and narrow the budget deficit. The MSCI Asia Pacific Index fell for a sixth day today amid concerns U.S. lawmakers may fail to reach an agreement to avoid a so-called fiscal cliff of $607 billion in automatic tax increases and spending cuts next year.
“The selloff in global markets is impacting local investor sentiment,” D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd., said by phone from New Delhi today. “The airwaves sale has been a dampener and has raised concern on government finances.”
The S&P CNX Nifty Index (NIFTY) fell 0.7 percent to 5,628.40 and its November futures settled at 5,647.95. India VIX, which gauges the cost of protection against losses in the Nifty, jumped 4.2 percent to 15.53. Trading volumes of shares in the Nifty were 41 percent more than the 30-day average, according to data compiled by Bloomberg.
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