India’s stock benchmark was little changed, after swinging between gains and losses, as data showed the nation’s economy grew at its slowest pace in more than two years.
The S&P BSE Sensex fell less than 0.1% to 31,137.59 at close in Mumbai. ICICI Bank Ltd, Tata Steel Ltd and Oil & Natural Gas Corp Ltd fell more than 1%. Adani Ports and Special Economic Zone Ltd and Sun Pharmaceutical Industries Ltd advanced. The NSE Nifty 50 was little changed. Last year’s cash ban and the country’s bad debts weighed on the economy as first-quarter growth slowed to 6.1%, a whole percentage point lower than economists’ estimates. The data sparked calls for an interest rate cut even as the government stuck to its forecast of an expansion of 7.1% in fiscal 2017.
“The growth slowdown is largely due to demonetisation and most of the pain seems to be over,” said Kishor Ostwal, managing director at CNI Research Ltd. “The data has brightened chances of a rate cut as the focus is to push the Indian economy on high speed.”
The Reserve Bank of India meets on June 6 and 7 to decide on monetary policy. Governor Urjit Patel in April unexpectedly raised the reverse repo rate while keeping the benchmark unchanged to keep a lid on inflation.
On the currency front, the rupee remained flat and marginally rose by four paise to 64.47 per US dollar from its previous close of 64.50-51.