Indian Stocks Swing as National Election Enters Final Lap

(Bloomberg) -- Indian stocks swung between gains and losses ahead of the results of the general election due next week and as last week’s escalation in the trade war between the world’s top two economies weighed on the region’s risk assets.

The S&P BSE Sensex eked out a 0.2% gain to 37,540.3 at 10:25 a.m. in Mumbai, after capping its worst week since October on Friday. The NSE Nifty 50 Index was little changed, while the India NSE Volatility Index -- a gauge of expected swings used to price options -- reached its highest level since September 2015.

India’s marathon general election is now in its final phase with 59 seats in eight states going to vote on May 19. The results will be declared on May 23. On the earnings front, 15 of the 25 Nifty companies that have reported so far have either met or exceeded estimates.

Strategist View

• “Equity valuations are at an all time high and there is a significant downside to earnings. We see a persistent and pervasive downturn across the consumer sector,” said Vijay Krishna-Kumar, head of liquid alternatives investment and IDFC Asset Management Co. “Some of this is related to regulatory changes, but some of it is real.”
• “The non-bank finance company crisis is having a knock-on effect on growth. We are currently advising caution to our investors,” he said.

The Numbers

• Thirteen of the 19 sector sub-indexes compiled by BSE Ltd. declined led by a gauge of capital goods companies
• Larsen & Toubro Ltd. contributed the most to the index decline and had the largest move, decreasing 2.6%.
• Tata Consultancy Services Ltd. provided the biggest boost to the index and had the largest gain, advancing 1.05%.
• Tata Steel Ltd. fell 1.4% after joint venture with Thyssenkrupp called off

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