Indian Stocks Decline as Rupee Slumps, Funds Extend Selloff
Indian (SENSEX) stocks extended yesterday’s plunge after the rupee tumbled to near a record low and as overseas funds capped the longest selloff in 18 months.
The S&P BSE Sensex fell 0.3 percent to 18,664.4 at 9:38 a.m. in Mumbai after losing 2.7 percent yesterday, its biggest drop since Sept. 22, 2011. declines among banks. Jindal Steel & Power Ltd. (JSP) sank 5 percent, the worst performer on the Sensex. Cigarette maker ITC Ltd. (ITC), which has the highest weighting on the gauge, headed to a two-month low.
India’s rupee fell 0.3 percent after tumbling to a record yesterday, prompting the central bank to intervene to support the currency, after the U.S. signaled it may begin phasing out its $85 billion-a-month stimulus. Foreigners sold local stocks for a seventh day on June 19, the longest series of outflows since December 2011, data compiled by Bloomberg show.
The Federal Reserve said June 19 that it could taper its monthly bond-buying program later this year and halt the purchases in mid-2014 as long as the U.S. economy performs in line with the central bank’s projections.
The Sensex has plunged 7 percent since Fed Chairman Ben S. Bernanke first signaled stimulus efforts may be pared, sending valuations to 12.8 times projected 12-month profits yesterday, the lowest level since April.
Overseas funds have pulled $402 million from local stocks and $3.4 billion from rupee debt this month, exchange data show. A net foreign outflow of $78 million from shares on June 19 pared this year’s purchases to $14.7 billion, still a record for the period, data compiled by Bloomberg show.
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