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Sensex falls to three-week low before CAD data
The S&P BSE Sensex dropped 1.8% to 19,379.77, the lowest close since 6 September. Photo: Mint
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India’s benchmark stock index fell to a
three-week low, paring a monthly gain, before the release of current
account deficit data and a potential US government shutdown. Banks and
capital goods companies led the retreat.
ICICI Bank Ltd., the country’s second-biggest lender, slid 4.3%. Power-equipment producer Bharat Heavy Electricals Ltd. (BHEL) lost 4.4% after jumping 6% last week. Oil and Natural Gas Corp. Ltd. (ONGC), the country’s largest explorer, decreased for a third day. The rupee weakened 0.2%.
The S&P BSE Sensex dropped 1.8% to 19,379.77, the
lowest close since 6 September. The current-account gap widened to
$21.77 billion in the three months ended June from $18.08 billion, data
released after trading ended showed. The median estimate in a Bloomberg
survey was $23 billion. The fiscal and current-account deficits have
driven the rupee down 12% in 2013, and this month prompted Standard
& Poor’s to say there is more than a one-in-three chance the country
will lose its investment-grade rating within two years.
There was nervousness due to the US debt ceiling concern and the impending data on the current-account deficit, said Kaushik Dani, a fund manager with Peerless Mutual Fund, which has about $725 million in assets.
ICICI tumbled to Rs883.65, the lowest close since 4 September. State Bank of India (SBI) dropped 1.6% to Rs1,614.90. HDFC Bank Ltd., the biggest lender by value, lost 2.6% to Rs593.05. The 13-member S&P BSE Bankex fell 2.8%. Mortgage lender Housing Development Finance Corp. Ltd. (HDFC) decreased 2.5% to Rs764.25.
BHEL, Reliance
BHEL slumped 4.4% to Rs137.40, paring the monthly climb to 15.5%. ONGC declined 2.4% to Rs267.85. Tata Steel Ltd. lost 5.5% to Rs271.55, a one-month low. Reliance Industries Ltd., owner of the world’s largest refining complex, lost 2.1% to Rs822.40.
Global equities fell, trimming their best quarter in 18
years, as a budget impasse in the US threatens to shut down parts of the
world’s largest economy for the first time in 17 years. The US Congress
has just one day to end a stalemate.
The MSCI All Country World Index lost 0.6% as of 12:26 pm
in London as the Stoxx Europe 600 Index slid 0.7% and Asia’s benchmark
gauge fell 1.5%.
Investors are jittery as a US shutdown will affect fund flows to emerging markets, including India, D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd. in New Delhi, said in an interview on Monday.
Net Buyers
Overseas funds bought a net $2.1 billion of local shares
this month, the first monthly net inflows since May, after the Reserve
Bank of India (RBI) governor Raghuram Rajan
announced plans to boost the rupee when he took charge on 4 September
and the US Federal Reserve decided to keep stimulus. Inflows helped the
rupee rebound 10% from a record low of 68.845 per dollar on 28 August
and fueled a 4.1% rally in the Sensex this month, the biggest since
November.
The Sensex has lost 0.2% this year and is valued at 13.4
times estimated 12-month profits, versus the five-year average of 14.1
times. The gauge is headed for a 4.8% climb, ending three months of
decline. The MSCI Emerging Markets Index is trading at 10.4 times.
The CNX Nifty on the National Stock Exchange (NSE)
decreased 1.7% to 5,735.30. India VIX, which gauges the cost of
protection against losses in the Nifty, jumped 11%.
Overseas funds sold a net $28 million of domestic shares
on 27 September, data from the regulator showed. That took this year’s
net inflow to $13.5 billion, the second-highest among 10 Asian markets
tracked by Bloomberg. Bloomberg
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