Bloomberg News

Indian Stocks Slump Caused by ‘Basket-Selling,’ Choksey Says

November 23, 2011

Nov. 23 (Bloomberg) -- Deven Choksey, managing director at Mumbai-based K.R. Choksey Shares & Securities Pvt., comments on the slump in Indian equities.

The benchmark BSE India Sensitive Index sank 2.7 percent to 15,630.25 at 1:22 p.m. local time, set for the lowest close since Nov. 3, 2009. The S&P CNX Nifty Index on the National Stock Exchange of India Ltd. plummeted 2.7 percent to 4,663.17.

“The Nifty has taken support at the 4,700 level in the past and its drop below this level triggered basket-selling. There seems to be an unwinding of long portfolios as fear is gripping the minds of investors.

‘‘I would attribute the sell-off to a combination of global and domestic headwinds. If rupee stops its slide, we may see the market recover some of its lost ground.’’

The rupee slid to a record yesterday, taking its decline in the past four months to 15 percent, the most among 10 Asian currencies tracked by Bloomberg. A weak currency increases the cost of imported commodities, boosting inflation and spurring higher interest rates.

--Editor: Ravil Shirodkar

To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net;

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.


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