Indian shares slide on profit booking ahead of US elections, Fed rate decision
Updates at 10:14 a.m IST
By Bharath Rajeswaran
Nov 4 (Reuters) -Indian shares dropped more than 1% on Monday, weighed down by broad-based profit booking, while volatility spiked ahead of the U.S. presidential election and the likelihood of further U.S. interest rate cuts.
The NSE Nifty 50 .NSEI fell 1.4%to 23,964.6 points as of 10:26 a.m. IST, while the BSE Sensex .BSESN lost 1.32% to 78,679.45. They rose about 0.4% each in the special one-hour session during the holiday on Friday.
"Despite the gains on the special session on Friday, the market remains under pressure," said Palka Arora Chopra, director at Master Capital Services.
"Investors are adopting 'selling on any rise' approach, with the market likely to be guided by U.S. presidential elections on Tuesday and rate decisions from several global central banks, including the Fed (Federal Reserve) later in the week."
All the 13 major sectors logged losses.
Analysts said there could be further profit booking in the coming sessions, with volatility likely to rise further, as investors await clarity on the political front and the rate trajectory in the world's largest economy.
The marketsexpect the Fed to opt for a 25 basis point rate cut on Nov. 7. Lower interest rates in the U.S. could spur higher foreign inflows into emerging markets like India.
The Nifty volatility index .NIFVIX rose to 17.25, its highest since early August on Monday.
Drug maker Sun Pharma SUN.NS fell 3% after a U.S. district court granted a preliminary injunction moved by Incyte Corp INCY.O, preventing it from launching a key drug.
Two-wheeler maker Bajaj Auto BAJA.NS fell 4.7% after posting a drop in monthly domestic sales in October.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy
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