Sen­sex snaps win­ning streak; ru­pee falls

Gulf Times Business - - BUSINESS - Bloomberg, Reuters

In­dia’s shares fell as higher crude prices and con­fus­ing sig­nals over the US-China trade talks snapped the bench­mark’s long­est run of gains in four months. In­vestors are also await­ing the out­come of state elec­tion re­sults to as­sess the po­lit­i­cal mood be­fore a na­tional bal­lot in 2019.

The S&P BSE Sen­sex dropped 0.3% to 36,134.31 points in Mum­bai, while the NSE Nifty 50 In­dex de­clined 0.1%. The states of Ra­jasthan and Te­lan­gana will go to polls on De­cem­ber 7.

Twelve of the 19 sec­tor sub-gauges com­piled by BSE Ltd slipped, led by the con­sumer goods in­dex’s 0.7% loss. Hous­ing Devel­op­ment Fi­nance Corp Ltd and HDFC Bank Ltd were the big­gest drags on the Sen­sex.

Sun Phar­ma­ceu­ti­cal In­dus­tries Ltd was among the worst per­form­ers on the main gauge.

“We will have to see how oil prices re­act in the com­ing weeks and what is the stance of the oil-pro­duc­ing coun­tries to the pro­duc­tion cuts,” said Chokkalingam G, man­ag­ing di­rec­tor at Equinomics Re­search & Ad­vi­sory in Mum­bai.

Price of Brent crude, In­dia’s big­gest im­port, climbed to $62.28 a bar­rel yes­ter­day af­ter slip­ping into bear ter­ri­tory last month. The main event is elec­tions, and in­vestors wish to un­der­stand in which di­rec­tion the po­lit­i­cal wind is blow­ing,” said A K Prab­hakar, head of re­search at IDBI Cap­i­tal Mar­ket Ser­vices Ltd in Mum­bai.

Vote count­ing for all five In­dian states will be held on De­cem­ber 11. The exit polls will be out in the evening of De­cem­ber 7.

Mean­while the ru­pee fell beyond 70.50 a dol­lar amid ris­ing oil prices. The ru­pee set­tled at 70.51 a dol­lar, down 5 paise from Mon­day’s close. On Mon­day, the ru­pee had closed at 70.46 against the US dol­lar, drop­ping by 88 paise, its big­gest sin­gle-day loss in more than three months.

Weak do­mes­tic eq­uity mar­kets also weighed on the ru­pee. Mar­ket bench­mark in­dices Sen­sex and Nifty broke their six-ses­sion ris­ing streak as cau­tious in­vestors weighed a host of fac­tors like de­pre­ci­at­ing ru­pee, ris­ing crude prices and weak global cues.

The dol­lar weak­ened against its ma- jor peers yes­ter­day af­ter the US-China trade truce calmed global mar­kets. The 10-year gov­ern­ment bond yield stood at 7.615% from its pre­vi­ous close of 7.626%. Bond yields and prices move in op­po­site di­rec­tions.

Traders are cau­tious ahead of RBI’s mon­e­tary pol­icy de­ci­sion. An­a­lysts be­lieve the out­come may be a non-event on the key rate front, but the focus will be on RBI’s com­mu­ni­ca­tion and stance.

So far this year, the ru­pee has de­clined 9.33%, while for­eign in­vestors have sold $4.89bn and $7.57bn in the eq­uity and debt mar­kets, re­spec­tively.

Asian cur­ren­cies were trad­ing higher on con­tin­ued dol­lar weak­ness even amid signs it will be dif­fi­cult for the US and China to re­solve their trade war.

China ren­minbi was up 0.33%, Ja­panese yen 0.31%, China Off­shore 0.24%, Thai baht 0.22%, Sin­ga­pore dol­lar 0.15%, Tai­wan dol­lar 0.14%, Hong Kong dol­lar 0.08%, South Korean won 0.05%. How­ever, Philip­pines peso was down 0.48%, In­done­sian ru­piah 0.32%.

The dol­lar in­dex, which mea­sures the US currency’s strength against ma­jor cur­ren­cies, was trad­ing at 96.816, down 0.23% from its pre­vi­ous close of 97.04.

The Bom­bay Stock Ex­change build­ing in Mum­bai. The Sen­sex closed down 0.3% to 36,134.31 points yes­ter­day.

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