U.S. Election Anxiety Holds India’s Sensex at Four-Month Low

  • Tighter contest for U.S. president puts investors on edge
  • Foreigners turn net sellers in October, first time in 8 months

Indian stocks dropped for a fourth day, with the benchmark holding at a four-month low, as a tightening race for the U.S. presidency deterred investors from making fresh bets before the Nov. 8 vote.

The S&P BSE Sensex lost 0.4 percent at the close in Mumbai after changing direction at least 15 times. Bulk of the losses came in the final hour of trade, with software exporters, health-care and energy companies being among the worst performers on the gauge.

Investors turned more risk averse over the past week as polls suggested Hillary Clinton’s once dominant lead over Donald Trump was faltering. Bets on a December interest-rate hike by the Federal Reserve were stepped up after a policy meeting concluded Wednesday with the central bank signaling a move next month is likely.

IndexChange Size and Scope 
BSE Sensex-0.4%Lowest level since July 
NSE Nifty 50-0.3%Second day of declines
BSE Midcap-1.4%Lowest level in a month

“For the next few weeks, the index is likely to trade in a range given the uncertainties around the U.S. elections," Chokkalingam G., managing director at Mumbai-based Equinomics Research & Advisory Pvt., said by phone. “Buying by local funds has cushioned the selling by foreign investors.”

Foreigners withdrew $746 million from Indian stocks in October, ending seven months of inflows. The Sensex still eked out a 0.2 percent gain as domestic mutual funds were net buyers of shares worth 81.1 billion rupees ($1.2 billion), according to data compiled by Bloomberg.

Besides the U.S. vote, local investors are looking at company earnings for signs of economic growth filtering through to profits. So far, 19 of the 30 Nifty members that have posted results have beaten estimates, data compiled by Bloomberg show.

The Sensex has climbed 5 percent this year and trades at 16.3 times projected 12-month earnings, compared with a five-year average of 14.4 times.

  • Strides Shasun Ltd. rallied 7.3 percent to a three-month high after the pharmaceutical company and U.S.-based Mylan NV agreed to settle claims on the Agila Specialties Pvt. deal. Mylan purchased Bangalore-based Agila from Strides in 2013.

  • IL&FS Engineering & Construction Co. plunged 5.6 percent after defaulting on some bond redemptions.

  • Premier Explosives Ltd. rose 2.5 percent to a four-month high after its second quarter profit rose 27 percent.

  • Gujarat Narmada Valley Fertilizers & Chemicals Ltd. plunged a record 18 percent after ET Now television reported that the company’s Dahej plant has been shut following a gas leak. The channel cited company officials, without identifying them.

  • Gati Ltd. advanced 2.7 percent, while Snowman Logistics Ltd. gained 1.1 percent after a government official said the tax rates for GST are likely to be announced on Thursday.

  • Ambuja Cements Ltd. added 1 percent after reported third-quarter profit of 2.8 billion rupees, beating the estimate of 2.4 billion rupees.

  • Multi Commodity Exchange of India Ltd. surged 5.5 percent, the most since Sept. 28, after the Economic Times reported, the market regulator may allow mutual funds to trade in commodity markets.
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