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Indian Stocks

India: equities backtrack

The Indian stock indices closed sharply in the red on Thursday, August 22, as traders became concerned that the country’s economy could be heading for a slowdown, while the government continues to rest on its laurels.

Notably, Chief Economic Adviser Krishnamurthy Subramanian let down investors today by saying that the Indian economy currently does not need any fiscal stimulus to combat a potential slowdown.

Adding to negativity, senior government official Subhash Chandra Garg unveiled a modest GDP outlook, with the Q2 growth estimate standing at 5.5-5.6% after 5.8% in Q1.

By the close, the Nifty 50 retreated 1.62% to 10,741.35, and the BSE Sensex was off 1.59% at 36,472.93.

The USD/INR pair firmed 0.72% to 71.942. The 10-year Indian government bond yield narrowed 0.11% to 6.553%.

In sectoral terms, only IT stocks logged gains, with Tech Mahindra and Tata Consultancy picking up 2.1% and 1.3%, respectively.

Financial services names posted the biggest losses. Specifically, Yes Bank tanked 20.9%, Indiabulls Housing sank 13.6%, while Bajaj Finserv and Bajaj Finance shed 6.5% and 5.5%.

From a technical standpoint, the daily chart shows that the BSE Sensex is forming a descending wedge, with the benchmark holding short-term downside potential within the current formation.

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