India Stocks Drop for Sixth Day on Concern About Sales Tax Billby
Congress party disrupts parliament over Gandhis case
Gati, Allcargo lead retreat among logistics companies
Indian stocks slid for a sixth day, with the benchmark gauge at a three-month low, amid concern over the passage of the goods-and-services tax bill in parliament and continued outflows from local equities by overseas investors.
Gati Ltd. capped its biggest two-day decline in more than three months, pacing losses among logistics and delivery companies that would benefit from the unified tax bill. Bharti Airtel Ltd., the largest mobile-phone operator, decreased to its lowest level since May 2014. Vedanta Ltd., the biggest copper producer, was the top loser on the main gauge.
The S&P BSE Sensex tumbled 1.1 percent to 25,036.05, the lowest close since Sept. 7. The parliament was disrupted for a second day after the opposition Congress party protested a court order for its leaders Sonia Gandhi and her son Rahul to testify in a corruption case filed by a member of the ruling Bharatiya Janata Party. The roadblock risks further delays to the tax bill that is the centerpiece of Prime Minister Narendra Modi’s reform push.
“The GST bill is important for the markets, but more fundamentally, for the country,” Madhav Dhar, a New Delhi-based managing partner at GTI Capital Group, an India-focused investment firm, said in an interview with Bloomberg TV India Wednesday. “I hope that this is just another little squall and things will settle down.”
The complaint against the Gandhis accuses them of forming a company to cheaply acquire 20 billion rupees ($300 million) of property assets from a defunct newspaper that served as the Congress party’s mouthpiece for eight decades. The Congress party leaders have denied wrongdoing and say the case is politically motivated. Modi’s camp says it has nothing to do with the proceedings and independent courts will determine what happened.
Gati plunged 7.9 percent, extending Tuesday’s 5.7 percent decline. Gateway Distriparks Ltd. fell 1 percent, ending two days of advance. VRL Logistics Ltd. tumbled 2.1 percent to its lowest level since Nov. 20. Snowman Logistics Ltd. plunged 4.1 percent, taking this week’s retreat to 10 percent. Transport Corp of India Ltd. fell 8.8 percent, while Allcargo Logistics Ltd. slid 5.2 percent. Container Corp Of India Ltd. declined 5.9 percent.
Bharti Airtel fell 2.2 percent. Vedanta tumbled 5.6 percent to the lowest level since Aug. 24. The stock has slumped 62 percent in 2015. Tata Steel Ltd. and Hindalco Industries Ltd., an aluminum maker, decreased at least 3 percent.
International investors sold a net $6.3 million of Indian stocks on Dec. 7, reducing the year’s inflows to $2.9 billion. They pulled $1.1 billion in November as the U.S. Federal Reserve prepares to raise borrowing costs for the first time since June 2006. Futures are indicating an 80 percent probability that the Fed will raise rates at a meeting next week.
The Sensex has fallen 9 percent this year and trades at 14.8 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 10.9.