Indian Stocks Fall, Tracking Global Peers After Fed Minutes

Indian stocks fell, set to snap three days of gains, as a risk-off mood swept through global markets following the release of minutes from the U.S. Federal Reserve’s July meeting.

The benchmark S&P BSE Sensex Index declined 0.7% to 38,332.13 as of 10:09 a.m. in Mumbai, after reaching a five-month high on Wednesday. The NSE Nifty 50 Index dropped 0.6%. The MSCI Asia Pacific Index slid 1.6%, the most since the end of July, after the minutes showed U.S. central bankers backing off from an earlier readiness to set a clearer bar for raising interest rates.

Read: Fed Minutes Show FOMC Backs Away From September Guidance Shift

Even with today’s decline, the almost 2% gain in the Sensex this month puts the measure on course for its best August in two years. Foreign buyers have pumped $5.37 billion into Indian stocks so far this month, setting it up for the most inflows in 17 months.

“We are positively surprised by the extent of cost controls that companies were able to realize” in the June-ending quarter, Citigroup Inc. analysts Surendra Goyal and Vijit Jain wrote in a note. They are overweight in the financials and telecom stocks and underweight consumer and metal companies.

As India faces its first annual economic contraction in four decades, 29 of the 48 Nifty 50 members that have reported quarterly earnings this season have met or exceeded estimates, according to Bloomberg analysis. The data includes HDFC Life Insurance Co. and excludes Vedanta Ltd. Coal India Ltd. and Oil & Natural Gas Corp. as the two Nifty 50 members yet to post their reports.

The number of confirmed coronavirus cases in India stands at 2.77 million, with the number of deaths from Covid-19, the disease it causes, nearing 53,000. About 2.04 million people have recovered.

The yield on 10-year bonds fell one basis point to 5.96%, while the rupee weakened 0.3% to 75.0125 per dollar.

The Numbers

  • Thirteen of the 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of bank shares
  • ICICI Bank Ltd. contributed most to the Sensex’s slide, falling 2.1%, and Titan Co. was the biggest decliner, decreasing 2.3%

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— With assistance by Paresh Jatakia, Subhadip Sircar, and Kartik Goyal

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