Indian shares slide on profit booking ahead of US elections, Fed rate decision
Updates at 11:47 a.m. IST
By Bharath Rajeswaran
Nov 4 (Reuters) -Indian shares dropped about 2% on Monday, set for their worst session in a month, 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 1.79% to 23,869 points as of 11:47 a.m. IST, while the BSE Sensex .BSESN lost 1.65% to 78,397.66. Both benchmarks are on course to post their highest single-day losses 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.
Democratic candidate Kamala 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.
Investors are waiting for the results to take fresh positions on a sectoral basis, analysts said.
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 2.2% and 1.5%, respectively.
The Nifty volatility index .NIFVIX rose to 17.6, its highest since early August.
Forty-six of the Nifty 50 constituents declined.
Among them, Sun Pharma SUN.NS retreated 4.5% after a U.S. district 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 tumbled 5% after posting a drop in domestic sales in October.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sumana Nandy and Savio D'Souza
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
