Mumbai: India’s equities fell for a fourth straight day, with investors piling into IT stocks that are considered relatively insulated from the country’s gloomy economic outlook.
The S&P BSE Sensex lost 0.8% in Mumbai. The benchmark index had its steepest slide in two weeks yesterday, sending it below the 50-day moving average, signaling to some investors that there are further losses to come. The NSE Nifty 50 Index dropped 0.9%. A gauge of IT companies rose 0.9%, while 16 out of 19 sector sub-indexes compiled by BSE Ltd. dropped.
“The strong performance of IT stocks reflect investor’s concerns about economic growth, particularly since stocks are trading at levels close to where they were pre-pandemic,” said Chokkalingam G, chief investment officer at Equinomics Research & Advisory Ltd. in Mumbai.
Until yesterday’s losses, the Sensex had surged 50% from its coronavirus pandemic-triggered low in March to within striking distance of the January record high even as Indian coronavirus cases continued to surge to the second-highest globally and the economy faces its steepest ever contraction.
As Indian stocks head toward their worst month in four, some equity funds may be diverted by a revival in initial public offerings. Computer Age Management Services Pvt. Ltd. aims to raise as much as 22.4 billion rupees ($305 million), while Chemcon Specialty Chemicals Pvt. Ltd. is seeking 1.65 billion rupees, with both offers closing Wednesday. Stock broker Angel Broking Ltd. plans to raise 3 billion rupees in an offering through Thursday.
The yield on the benchmark 10-year government bond was little changed at about 6%, while the rupee weakened 0.3% to 73.5862 against the U.S. dollar.
- Reliance Industries Ltd. was the biggest drag on the Sensex, losing 2%, while Maruti Suzuki India Ltd. had the steepest fall, dropping 2.8%; Tata Consultancy Services Ltd. provided the biggest boost to the index with a 2.4% gain- Bloomberg
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