Foreign investors are cutting their holdings in India’s state-controlled companies to a three-year low as Prime Minister Manmohan Singh’s government sacrifices shareholder return to revive the weakest economy in nine years.
Sensex -0.2% at 25,313.74 * CNX Nifty -0.1%, volume 45% below 30-day avg.; BSE 100 -0.1%; BSE 500 little changed * Rupee ends little changed at 60.1325 per dollar after earlier weakening to one-week low on concern higher global oil prices, inadequate rainfall will spur inflation * BSE 100 gainers: Ashok Leyland +6%, Rural Electrification +4.5%, Power Finance +3.3% * BSE 100 decliners: Yes Bank -3%, Idea Cellular -2.7%, Oil & Natural Gas Corp -1.4%, JSW Steel Ltd -1.4% * Monsoon, higher oil prices are “short-term headwinds” for mkt, Jeff Chowdhry, head of emerging-market stocks at London- based F&C Asset Management, which oversees about $150b, tells Bloomberg TV India; foreign investors to favor India if govt. “pushes reforms” to tackle budget deficit and subsidies * NOTE: Govt. to present federal budget on July 10; PM Narendra Modi says he’s prepared to take unpopular measures to revive economy growin
Indian shares traded in New York dropped the most in a week, following shares in Mumbai lower, amid concern the nation’s budget lacks measures to curb expenditure key to containing the fiscal gap. Stock futures fell in Singapore and rupee forwards sank to near a six-week low.
Foreign investors withdrew the most money from Indian stocks in June in about two years on concern the nation’s public finances will worsen when the U.S. Federal Reserve starts tapering its monetary stimulus.
ICICI Prudential Asset Management Co., India’s third-largest money manager, is picking exporter stocks as concerns the U.S. will phase out stimulus caused the rupee to plunge and foreign funds to dump equities and debt.