(Bloomberg) -- Indian equities erased earlier gains as the benchmark gauges flirted with record highs. Jet Airways India Ltd. slumped by a record after the airline suspended operations amid a funding crunch.
The benchmark S&P BSE Sensex fell 0.3 percent to 39,169.86 as of 10:32 a.m. in Mumbai, reversing earlier gains. The NSE Nifty 50 Index dropped 0.4 percent to 11,746.00. Both had hit records on Tuesday. The market was shut yesterday and will be closed tomorrow for public holidays.
Local equities have gained from a gush of foreign money this year amid a rising appetite for riskier assets as central banks globally revert to a dovish monetary stance. Overseas investors have bet on lower interest rates and inflation, growth in company profits and the increasing chance that the incumbent national government will retain power. India today holds second of its seven rounds of voting that will span until May 19, with counting on May 23.
Read: It’s Started! Your Guide to India’s Marathon Election: QuickTake
Strategist View
- “The current market rally is a result of robust foreign flows, more so on the back of a better risk environment, led by softer rates and a better liquidity outlook,” said Vaibhav Sanghavi, co-chief executive officer at Mumbai-based Avendus Capital PBC Markets Alternate Strategies LLP.
- The election is a binary event; however, investors looking at the opinion polls are taking some comfort from them, he said.
- Better corporate profits would be a key tailwind medium-term, he said.
The Numbers
- Wireless carrier Bharti Airtel Ltd.’s 3.9 percent drop was the steepest among Nifty members, halting a two-day gain.
- Reliance Industries Ltd. -- India’s most valued company -- gained 2.3 percent after it was said to consider selling as much as 25 percent of its refinery business. It will report its January to March earnings later today.
- Seventeen of the the 19 sector indexes compiled by BSE Ltd. retreated, paced by a gauge of property stocks. The S&P BSE Energy Index rose the most.
- Twenty-two of the 31 Sensex members and 38 of the 50 Nifty companies declined.
- Jet Airways slumped by a record 27 percent, the steepest on S&P BSE 500 Index. Rival SpiceJet Ltd. gained 7.7 percent.
Analyst Notes/Market-Related Stories
- Nifty Index’s Positive Bias Likely to Continue: Kotak Securities
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