Indian Stocks Fall on Thin Volumes as Consumer Firms Pace Losses

  • Nifty volume about half of 30-day mean before holiday season
  • Overseas funds were net sellers in nine of the past 10 weeks

Economists Cut Growth Expectations for India

India’s consumer companies countered a rally in energy stocks as the benchmark equity equity index declined for a fourth day amid thin volumes.

Asian Paints Ltd. fell to a seven-month low, the worst performer on the S&P BSE Sensex. Indian Oil Corp. advanced 2.9 percent to pace a rally in energy shares as the biggest state-run refiner raised gasoline and diesel prices on the weekend.

Index

Change (%)

Size and Scope

BSE Sensex-0.5Longest losing run in a month
BSE MidCap-0.5One-month low
BSE Oil & Gas+1Ends three-day decline

Indian stocks have been battered since November after Prime Minister Narendra Modi’s shock decision to scrap high-value currency bills hurt demand in an economy where almost all consumer payments are made in cash. Gross domestic product, which grew a slower-than-estimated 7.3 percent in the September quarter, will contract to 6.5 percent over the next three months, according to the median estimate in a Bloomberg survey.

“There’s confusion about the economic direction,” Nikhil Khandelwal, managing director of institutional equities at Mumbai-based Systematix Shares & Stocks Ltd., said on phone. The NSE Nifty 50 Index will trade in the 7,950-8,300 range until the government announces the federal budget in February, he said.

Trading volumes on the Nifty, which fell 0.4 percent to 8,104.4 on Monday, were 46 percent below the 30-day daily average. Activity is expected to remain sluggish in the coming weeks before the December holiday season and end of the year, Khandelwal said.

Overseas investors turned net sellers of Indian shares in the five days through Friday, the ninth such week in the past 10, data compiled by Bloomberg show.

Summary

  • Sun Pharmaceutical Industries Ltd. retreated 2.3 percent to its lowest closing price since June 2014. The shares were cut to neutral from outperform at Credit Suisse and the 12-month price estimate was reduced 23 percent to 620 rupees.
  • Laurus Labs Ltd. surged 12 percent in its trading debut after its initial share sale got bids for about 99.6 million shares versus 21.9 million offered.
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