Most Indian stocks declined, paring the weekly advance, after interest-rate reductions in Europe and China failed to assure investors the moves will be enough to boost economic growth.
Infosys Ltd. (INFO), India’s second-largest software exporter that gets 98 percent of its sales from abroad, paced declines among its peers. Jindal Steel & Power Ltd. (JSP) slumped the most in a month after the Wall Street Journal reported the steelmaker halted work at its Bolivia iron-ore mine. The BSE India Sensitive Index (SENSEX) lost 0.1 percent to 17,521.12, according to preliminary closing prices.
The European Central Bank yesterday cut its benchmark rate to a record low and the People’s Bank of China pared borrowing costs for a second time in a month. ECB President Mario Draghi said the reductions may have only a “muted” effect, and the International Monetary Fund will lower its growth estimate for the global economy, Managing Director Christine Lagarde said.
“Investors want to see how the EU situation stabilizes and how rate cuts in China translate into growth,” K.K. Mital, a fund manager at Globe Capital Market Ltd., said by phone from New Delhi. “They are cautious.”
Indian stocks also declined after the rupee weakened for a third day as the most-accurate forecaster for the currency said it will extend the past year’s declines as the country fails to meet targets for attracting global funds.
The rupee, which fell to a record 57.3275 a dollar on June 22, lost 1 percent to 55.5275 at 12:40 p.m., paring the weekly gain to 0.2 percent. Asia’s worst-performing currency in the past 12 months will drop 6.1 percent in three months to 58.5, according to Credit Suisse Group AG, which had the closest estimates in the last six quarters as measured by Bloomberg Rankings.
Overseas funds bought a net $55 million of Indian stocks on June 4, raising their investment this year to $9.4 billion, according to the nation’s market regulator. That’s a record for the period, according to data compiled by Bloomberg.
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