(Bloomberg) — Indian stocks fell, snapping a three-day gain, as a risk-off mood swept through global markets after Federal Reserve minutes fueled concern over the pace of recovery for the world’s largest economy.
The benchmark S&P BSE Sensex Index declined 1% to end at 38,220.39, after closing at its highest since March 3 on Wednesday. The NSE Nifty 50 Index fell 0.8%. The MSCI Asia Pacific Index was down 1.5%, led by a slump in technology shares.
Fed officials noted that the coronavirus pandemic would weigh heavily on economic activity, according to minutes of the central bank’s July meeting. Separately, India’s interest rate-setting panel turned cautious about a recent surge in consumer inflation, according to minutes of the Aug. 4-6 meeting published after close of trading Thursday.
Even so, the Sensex is up 1.6% so far this month, with foreign investors having bought a net $5.4 billion of local stocks — set to be the biggest inflow in 17 months. While India’s economy faces its first annual contraction in four decades due to the coronavirus pandemic, as many as 29 of the 48 Nifty 50 members that have reported quarterly earnings this season have met or exceeded estimates, according to Bloomberg analysis.
“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.
The number of confirmed coronavirus cases in India stands at 2.77 million, with the number of deaths nearing 53,000. About 2.04 million people have recovered.
The yield on 10-year bonds fell two basis points to 5.95%, while the rupee weakened 0.3% to 75.03 per dollar.
The Numbers
Ten of the 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of telecom sharesReliance Industries Ltd. contributed most to the Sensex’s slide, falling 1.7%, and Housing Development Finance Corp. was the biggest decliner, decreasing 2.4%
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