India stocks drop as gloomy outlook damps sentiment

Bloomberg

India stocks extended losses as investors reassessed the prospect of further gains amid a gloomy economic outlook.
The S&P BSE Sensex lost 0.5% to 37,847.60 as of 10:06 am in Mumbai after its steepest slide in two weeks sent it below the 50-day moving average, signalling to some investors that there’s further losses to come. The NSE Nifty 50 Index dropped 0.6%.
“Investors are concerned about economic growth, particularly since stocks are trading at levels close to where they were pre-pandemic,” said Chokkalingam G, chief investment officer at Equinomics Research & Advisory Ltd. in Mumbai.
Until Monday’s losses, the Sensex had surged 50% from its coronavirus pandemic-triggered low in March to within striking distance of the January record high even as Indian coronavirus cases continued to surge to the second-highest globally and the economy faces its steepest ever contraction.
As Indian stocks head towards their worst month in four, some equity funds may be diverted by a revival in initial public offerings. Computer Age Management Services Pvt. Ltd. aims to raise as much as 22.4 billion rupees ($305 million), while Chemcon Specialty Chemicals Pvt. Ltd. is seeking 1.65 billion rupees, with both offers closing on Wednesday. Stock broker Angel Broking Ltd. plans to raise 3 billion rupees in an offering through Thursday.
The yield on the benchmark 10-year government bond was little changed at 6.02%, while the rupee weakened 0.1% to 73.5063 against the US dollar.
All 19 sector sub-indexes compiled by the BSE Ltd. fall, led by a gauge of real estate companies.
Reliance Industries Ltd. was the biggest drag on the Sensex, while Tata Steel Ltd. was the biggest loser, slipping 3%.