Bloomberg
India’s rupee declined the most in two weeks, and stocks fell as investors were unimpressed by the government’s economic stimulus package.
The rupee weakened as much as 0.5% in the third day of declines. The S&P BSE Sensex of stocks slid 2.8% at 2:50 pm in Mumbai, while the NSE Nifty 50 Index slipped by a similar magnitude. Both measures capped their second-week of losses and are trading at their lowest levels since mid-April.
“People are more concerned about short-term challenges and not the benefit of these measures in the long run,†said Ajit Mishra, vice president of research at Religare Broking Ltd. in Mumbai. “How these reforms will help improve demand in the near term is what everyone’s worried about.â€
India extended its lockdown to May 31, while easing restrictions on some businesses after unveiling a rescue package equivalent to 10% of the economy since February. Barclays Plc estimates the actual fiscal impact of stimulus will be only about 0.8% of gross domestic product, while equity strategists and economists are concerned the measures will fall short of tackling the near-term challenges posed by the pandemic, including boosting demand in an already fragile economy.
“Markets are factoring in a painful period for the economy that will see corporate earnings falling and bankruptcies rising for small companies and individuals,†said Anindya Banerjee, a currency analyst at Kotak Securities Ltd. in Mumbai.
The contagion is accelerating in the South Asian nation of 1.3 billion people, with 96,169 infections and 3,029 deaths,
according to data from John Hopkins University.
As the earnings season for the quarter through March continues, Bharti Airtel Ltd. is scheduled to report results today. Just five of the 18
Nifty 50 companies that have
reported so far have beaten
analyst estimates.
All except two of 19 sector sub-indexes compiled by BSE Ltd. slipped, led by a gauge of banks. HDFC Bank Ltd. dropped 5.7% and contributed the most to the index decline, while IndusInd Bank Ltd.’s 8.6% drop was the largest. Infosys Ltd. was the biggest boost and had the steepest gain with a 2.1% advance.