Indian shares were on track for their worst losing streak since mid-May on Wednesday amid disappointing corporate earnings and after the International Monetary Fund (IMF) cut its annual growth forecast for the country.
The broader NSE index was down 0.65% at 11258.05 as of 0435 GMT, while the benchmark BSE index was 0.5% lower at 37,795.73. Both indexes touched their lowest levels since mid-May.
Foreign investors have been selling heavily for the past few days on disappointment due to the tax surcharge, weak corporate earnings, and now the IMF's forecast cut, which is adding to the pain, said Sumit Pokharna, vice-president, Kotak Securities.
The IMF cut its forecast for Indian economic growth by 30 basis points to 7% in 2019, and 7.2% in 2020, citing a weaker-than-expected outlook for domestic demand, according to its World Economic Outlook report https://www.imf.org/en/Publications/WEO/Issues/2019/07/18/WEOupdateJuly2019.
Corporate results in India have taken a hit amid sluggish demand, a liquidity crisis in the shadow banking sector, and weak monsoons, with some of the country's biggest companies issuing warnings of slower growth.
Meanwhile, shares in India, the world's third-biggest oil importer, were also under pressure as crude prices edged higher as rising tensions with Iran fuelled concerns about supply disruptions and as U.S. inventory data showed a much bigger than expected drop in crude stockpiles.
Oil-marketing company Bharat Petroleum Corporation Ltd was the biggest percentage loser on the NSE index, falling as much as 4%.
Eicher Motors Ltd dropped 3.1% to its lowest since Jan. 2016, Hero MotoCorp Ltd slipped 2.3%, and Maruti Suzuki India Ltd declined 1.9%.
That dragged the Nifty Auto index 1.6% lower to its lowest level since Feb. 2016.
Shadow bank Mahindra and Mahindra Financial Services Ltd plunged 15% to its lowest since May 2017 after its profit sank nearly 75%, missing estimates.
Only 11 stocks out the NSE's 50 were trading in the green by 0435 GMT.
Large lender Housing Development Finance Corporation Ltd recovered after a three-day rout, rising as much as 2%.
Telecom tower company Bharti Infratel Ltd rose 1.4% ahead of its quarterly results.
Comments
Comments are closed.