Indian stocks pare gain, bonds decline

Bloomberg

Indian equities pared gains, while the rupee and sovereign bonds declined, after a skirmish between the nation’s soldiers and Chinese troops in a border area reignited geopolitical risks.
The benchmark S&P BSE Sensex index rose 1.1% as of 2:32 pm in Mumbai, after earlier climbing as much as 2.4% after the Indian army said three soldiers died in the face off. The NSE Nifty 50 Index added 0.6%. The yield on the most traded 6.45% 2029 bond rose by five basis point to 6.03%, while the rupee weakened 0.2% to 76.2075 per US
dollar.
“The loss of lives is hitting investor sentiment,” said Rahul Sharma, head of research at Mumbai-based Equity99 Advisors. “There is already overall negativity due to the spike in the number of coronavirus infections.”
There were “casualties on both sides,” an Indian army spokesman said in New Delhi on Tuesday, adding that officials were meeting to defuse the situation. The clash comes as India begins to reopen business after an extended lockdown even as coronavirus cases continue to climb.
“The China news rattled the market sentiment and that’s getting reflected in market moves,” says Harish Agarwal, a trader with FirstRand Bank Ltd. in Mumbai.
Ten of 19 sector sub-indexes compiled by BSE Ltd. declined, led by a measure of telecom stocks.
While HDFC Bank Ltd. gave the Sensex its biggest boost, adding 2.3%, while Housing Development Finance Corp.’s 3% gain was the steepest. Axis Bank Ltd. was the biggest drag on the index and had the biggest drop, declining 4.9%.