Mumbai: Indian stocks slid, sending the benchmark gauge to the lowest level since July, as concerns surrounding the outcome of the US presidential election dragged down global equities.
The MSCI Asia Pacific Index fell the most in a month, shares in Europe tumbled for an eighth day and futures presaged a seventh day of losses of US equities. The anxiety was fuelled by an ABC News/Washington Post poll showing Republican Donald Trump with 46 per cent support to Democrat Hillary Clinton’s 45 per cent ahead of the Nov. 8 election.
Global investors are staying on the sidelines until the US poll to see how the results will impact global risk sentiment. The Federal Reserve reviews monetary policy Wednesday, with some analysts saying a Trump victory would decrease the chance of an interest-rate hike next month. The India VIX Index climbed to a one-month high, reflecting rising demand for protection from market swings before the two events.
“There’s nervousness as the US election is being seen as a very close call,” Kaushik Dani, a fund manager with Karvy Stock Broking Ltd. in Mumbai, said by phone. “Trump has different views and his win may lead to disruption in the markets. That’s why we are seeing a rise in volatility.”
Foreigners pulled $746 million from Indian stocks in October, ending seven straight months of inflows. Domestic investors are looking at company earnings for signs of economic growth filtering through to company profits. So far, 19 of the 30 Nifty members that have reported results have beaten estimates, data compiled by Bloomberg show.
The Sensex has climbed 5.4 per cent this year and trades at 16.3 times projected 12-month earnings, compared with a five-year average of 14.4 times.
