India Stocks Decline After Central Bank Cautions on Shadow Banks




India Stocks Decline After Central Bank Cautions on Shadow Banks
India Stocks Decline After Central Bank Cautions on Shadow Banks  

(Bloomberg) -- Indian stocks extended declines to a third day as the central bank said it's seeing "signs of fragility" in some lenders after key indexes closed last week at their lowest level in two months.

The benchmark S&P BSE Sensex Index fell 0.7% to 38,067.08 as of 10:00 a.m. in Mumbai. The NSE Nifty 50 Index dropped 0.6%. Both measures were set for their lowest levels since mid-May.

The Reserve Bank of India is monitoring non-banking finance companies amid signs of stress to prevent another potential surge in soured debt at their bankers. Investors last week were spooked by higher taxes on the wealthy and some foreign funds in the budget.

Of the seven Nifty companies that have announced earnings so far, five have either met or exceeded analyst estimates. Kotak Mahindra Bank Ltd. will announce its earnings later in the day.

Strategist View

"Investors are hoping that good corporate numbers might save the current rout but eventually there will be disappointment," said Jimeet Modi, founder of Samco Securities Ltd. Investors should conserve cash and consider selling overvalued stocks, he said."Markets are facing headwinds on both domestic and global fronts and might take a further beating," said Ajit Mishra, vice president of research at Religare Broking Ltd. "We advise keeping a cautious stance and hedging positions."

The Numbers

16 of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of real estate stocks.Twenty of the 31 Sensex members and 37 of the 50 Nifty stocks declined.HDFC Bank Ltd. was among the top losers on the benchmark after its first-quarter earnings lagged consensus estimates. Shares in Vedanta Ltd. gained the most.
Insurer's Stock Fund Picks India Infrastructure Over ConsumptionRBI's Das Says India's Interest-Rate Stance Now Depends on Data

To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie, Kurt Schussler

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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