Indian stocks declined in a volatile session yesterday as trading resumed after a public holiday on Monday. Software companies and lenders offset gains in metal producers and automakers.
The BSE Sensex fell 53.60 points, or 0.19%, to close at 27,876.61 points and Nifty closed up 0.01%, at 8,626.25 points yesterday.
Tata Consultancy Services and Infosys, the nation’s biggest technology companies, slid at least 1.3%. Axis Bank was the worst performer on the S&P BSE Sensex. A gauge of metal shares rallied to a 20-month high as
Hindustan Zinc climbed to a record and Vedanta, a copper producer, rose to its highest price in 17 months.
The Sensex fluctuated between a gain of 0.4% and a loss of 0.3% before closing lower for a second day. The gauge eked out a 0.2% gain last month as foreigners sold $616mn of stocks, the first outflow since February, amid signs that major central banks are starting to turn away from loose policies. While the Federal Reserve is forecast to leave rates unchanged this week, futures traders see a 71% chance of an increase before the year-end. The uncertainty about who will win next week’s US presidential election is giving investors further cause for caution.
“The market is likely to trade in a range until the US election as the outcome will have an impact on global capital flows,” RK Gupta, managing director at Taurus Asset Management Co, which oversees $480mn in assets, said by phone from New Delhi.Domestic investors are looking at company earnings for signs of economic growth filtering through to company bottom lines. So far, 19 of the 30 Nifty companies that have reported results have beaten estimates, data compiled by Bloomberg show.
The Sensex has climbed 6.7% this year and trades at 16.6 times projected 12-month earnings, compared with a multiple of 12.4 for the MSCI Emerging Markets Index. The gauge closed little changed in a shortened trading session on Sunday to mark Diwali, the festival of lights.
Vedanta, India’s biggest base-metal producer, jumped 8.5% to its highest price since May 2015 after posting earnings that beat estimates.  Hindustan Zinc rallied 7.9% to a life-time high as prices of the metal surged to a five-year high after data on China’s manufacturing sector burnished the case for bullish sentiment on demand. Kitex Garments plunged 16% after its September quarter profit fell 39% to Rs129mn ($1.9mn).
Meanwhile the rupee yesterday strengthened against the US dollar tracking the gains in its local equity and Asian currencies markets.
The rupee was trading at 66.71 against the US dollar, up 0.11% from its previous close of 66.78. The home currency opened at 66.69 against the US dollar and touched a high of 66.67 – a level last seen on 19 October. So far this year, it fell 0.9%.
Asian currencies were trading higher after China manufacturing PMI jumped to a two- year high. Malaysian ringgit was up 0.36%, South Korean won 0.35%, Philippines peso 0.27%, Indonesian rupiah 0.12%, Thai Baht 0.09%, Singapore dollar 0.08%. However, Japanese yen was down 0.23% after Bank of Japan maintained its policy, China Offshore spot 0.06%.
The benchmark 10-year government bond yield was trading at 6.795% compared to Friday’s close of 6.794%. Bond yields and prices move in opposite directions.
India’s manufacturing purchasing manager’s index stood at 54.4 in October against 52.1 in September.
Foreign institutional investors (FIIs) have sold $645.70mn in debt and bought $6.89bn in equity till date this year.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.27, down 0.18% from its previous close of 98.445.