Global Rally Skips Indian Stocks as Nation Retaliates to Attacks

(Bloomberg) -- Indian equities declined, skipping a global rally, as investors assessed the nation’s retaliation to a deadly attack on its defense forces last week. The Indian army said in a text message that it’s engaged in a military encounter in Kashmir, with a report that some more personnel were killed.

The benchmark S&P BSE Sensex fell 0.5 percent to 35,626.59 as of 10:03 a.m. in Mumbai, headed for an eighth day of declines, its longest losing streak since August 2013. The NSE Nifty 50 Index retreated 0.5 percent.

Even though a global rally typically spurs Indian equities, local investors weighed the scope and costs of the nation’s retaliation to the attack on its defense forces last week. The assault came as the government ramps up to hold a national election that will test its popularity.

Strategist View

• “Military escalation on the border with Pakistan will have a negative sentimental impact on the markets,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd. in Mumbai. “It needs to be seen if the government changes its focus now and cuts down on doles to boost consumer spend.”
• “The confidence of people to invest has come down significantly and the markets will be closer to the bottom soon,” he said.
• “Liquidity squeeze continues to be a worry and investors will wait to see if economic growth is translating into a rise in the pace of company profits,” Sofat said.

The Numbers

Analyst Notes/Market-related Stories

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