Indian Stocks Drop to a Four-Month Low on Concern Over U.S. VoteBy
Poll shows Trump edging past Clinton; Fed to maintain rates
Foreigners turn net sellers in October, first time in 8 months
Indian stocks slid, sending the benchmark gauge to the lowest level since July, as concerns surrounding the outcome of the U.S. presidential election dragged down global equities.
The MSCI Asia Pacific Index fell the most in a month, shares in Europe tumbled for an eighth day and futures presaged a seventh day of losses of U.S. equities. The anxiety was fueled by an ABC News/Washington Post poll showing Republican Donald Trump with 46 percent support to Democrat Hillary Clinton’s 45 percent ahead of the Nov. 8 election.
Global investors are staying on the sidelines until the U.S. poll to see how the results will impact global risk sentiment. The Federal Reserve reviews monetary policy Wednesday, with some analysts saying a Trump victory would decrease the chance of an interest-rate hike next month. The India VIX Index climbed to a one-month high, reflecting rising demand for protection from market swings before the two events.
|Index||Change||Size and Scope|
|BSE Sensex||-1.3%||Steepest loss since Oct. 13|
|NSE Nifty 50||-1.3%||Lowest level since July 21|
|BSE Midcap||-1.8%||Lowest level since Sept. 30|
“There’s nervousness as the U.S. election is being seen as a very close call,” Kaushik Dani, a fund manager with Karvy Stock Broking Ltd. in Mumbai, said by phone. “Trump has different views and his win may lead to disruption in the markets. That’s why we are seeing a rise in volatility.”
Foreigners pulled $746 million from Indian stocks in October, ending seven straight months of inflows. Domestic investors are looking at company earnings for signs of economic growth filtering through to company profits. So far, 19 of the 30 Nifty members that have reported results have beaten estimates, data compiled by Bloomberg show.
The Sensex has climbed 5.4 percent this year and trades at 16.3 times projected 12-month earnings, compared with a five-year average of 14.4 times.
- Mahindra & Mahindra Ltd. rose 3.2 percent, the most in three months, after its tractor sales surged to 43,826 units in October from 27,280 a year earlier.
- Oil & Natural Gas Corp., Tata Motors Ltd. and State Bank of India were the top losers on the Sensex, posting losses of at least 2.5 percent each.
- Bharti Infratel Ltd. advanced for a third day after the Economic Times reported Tuesday that KKR & Co. and Canada Pension Plan Investment Board are looking to buy a stake in the company. Bharti Infratel said in a filing post-market Tuesday that it isn’t engaged in any negotiation with regards to a stake sale.
- Zensar Technologies Ltd. jumped 13 percent, the most in a year, after the company said it purchased U.K.-based Foolproof Ltd.
- Oudh Sugar Mills Ltd. and Taj GVK Hotels & Resorts Ltd. rallied after swinging to profit in the September quarter. Oudh rose 2.3 percent after reporting a profit of 186.3 million rupees in the September quarter compared with a loss of 191.5 million rupees a year ago.
Taj GVK jumped 5.4 percent, the most since Aug. 23, after reporting a net income of 34 million rupees in September quarter compared with a loss of 9.5 million rupees in the same period a year earlier.