Indian shares post worst session in over a month ahead of US election

Reuters

Indian shares post worst session in over a month ahead of US election

Nov 4, 2024 at 10:14 am GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>INDIA STOCKS-Indian shares post worst session in over a month ahead of US election</title></head><body>

Updates to close

By Bharath Rajeswaran

Nov 4 (Reuters) -Indian shares logged their worst session in more than a monthon Monday, weighed down by uncertainty around the hotly-contested U.S. presidential election, whilevolatility spiked to a three-month high.

The NSE Nifty 50 .NSEI fell 1.27% to 23,995.35, while the BSE Sensex .BSESN lost 1.18% to 78,782.24. Both benchmarks logged their biggest single-day drop since Oct. 3.

"Investors are cautious. They are refraining from making major bets and are taking profits because of uncertainty over U.S. presidential elections," said Kranthi Bathini, director of equity strategy at WealthMills Securities.

The benchmarks fell about 6% each in October on record monthly foreign outflows and dull earnings. They had gained 15% in the previous four months and hit record highs, but are still overvalued compared to historical averages, according to analysts.

In the U.S., DemocratKamala Harris and Republican candidate Donald Trump remain virtually tied in opinion polls ahead of Tuesday's election and the winner might not be known for days after voting ends.

"While a potential victory for Harris is seen as a neutral-to-positive event for markets, a Trump victory is seen as a positive due to his pro-corporate policies, including the plan to cut tax rates for companies," said Bathini.

Meanwhile, markets have priced in a 25-basis-point rate cut from the U.S. Federal Reserve on Nov. 7. Lower U.S. rates could spur higher foreign inflows into emerging markets such as India.

All the 13 major sectors logged losses on the day, while the broader, more domestically focussed small- .NIFSMCP100 and mid-caps .NIFMDCP100 lost 2% and 1.3%, respectively.

The Nifty volatility index .NIFVIX rose to 16.69, its highest since early August.

Forty-two of the Nifty 50 constituents declined. Among them,Sun Pharma SUN.NS retreated 2.6% after a U.S. court granted U.S.-based Incyte Corp's INCY.O preliminary injunction to prevent the Indian firm from launching a key drug.

Two-wheeler maker Bajaj Auto BAJA.NS lost 3.6% after posting lowerdomestic sales in October.

Hero MotoCorp HROM.NS dropped 4.3% after CLSA flagged a decline in market share last month.

Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy, Savio D'Souza and Sonia Cheema

</body></html>