Nifty falls below key level as India’s stocks reverse gains

Indian equities reversed gains, dragging the NSE Nifty 50 Index to its lowest level in nearly five months and below its 200-day mean.The benchmark S&P BSE Sensex fell 0.8% to 37,397.24 points at the close in Mumbai, erasing an increase of as much as 0.7%, for an eighth drop in nine trading sessions. The Nifty slid 0.9% to 11,085.40 points, its lowest closing since March 8.Stocks gave up gains in the last hour of trading. The Sensex and Nifty have slumped more than 7% from their record high closes in June as a lack of government effort to boost a slowing economy in its budget earlier this month and an increase in taxes on higher incomes have roiled the sentiment.Investors now await the US interest-rate decision this week and a local monetary policy meeting in the next, with expectations of 25 basis-point cuts from both.“Broadly, the sentiment is negative due to the economic slowdown and lack of exciting earnings reports by the companies,” said Rajnath Yadav, an analyst at Choice Equity Broking in Mumbai.“It’s still a liquidity-driven market and has factored in a 25 basis-point cut in both the US and local interest rates,” he said. Sixteen of the 19 sector indexes compiled by BSE Ltd retreated, paced by a gauge of metal stocks. Five of the indexes retreated more than 2%.Twenty-one of the 31 Sensex members and 40 of the 50 Nifty companies dropped.Shares of Yes Bank Ltd slumped 9.2%, the most among Sensex and Nifty members and extending its plunge this year to 52%. Bharti Airtel Ltd climbed 3.4%, the steepest gain since May 24, after BofAML upgraded its recommendation on the stocks to buy.Net incomes at 15 of the 24 Nifty companies that have reported earning so far have either beaten or matched analyst estimates, according to data compiled by Bloomberg. Jain Irrigation Systems Ltd slid 15% after Fitch lowered its debt score.Coffee Day Enterprises Ltd and Sical Logistics Ltd each plunged 20% after founder VG Siddhartha went missing.Meanwhile the rupee yesterday was little changed against the US dollar as traders exercised caution ahead of the resumption of US-China trade talks and the outcome of Federal Reserve’s policy review meeting this week.Having opened at 68.75 a dollar, the Indian unit was traded at 68.72, in early deals, up 0.02% from its previous close of 68.73. The yield on the 10-year government bond was at 6.419% compared with Monday’s close of 6.412%.The US Federal Reserve will meet on July 30-31 to review monetary policy and is widely expected to cut interest rates by a quarter percentage point.The benchmark equity index Sensex was up 0.01% at 37684.88 points. So far this year, the index has risen 4.89%.The rupee has risen 0.94% against the greenback in the year so far. Foreign investors bought $9.77bn in Indian equities and $2.51bn in the debt market during the period. Other Asian currencies traded higher. The South Korean won was up 0.13%, Thai baht 0.11%, China renminbi 0.1%, Taiwan dollar 0.1%, Philippines peso 0.08%, China Offshore 0.08% and Singapore dollar 0.07%. However, Malaysian ringgit was down 0.18%. The dollar index, which measures the US currency’s strength against a basket of major currencies, was at 98.097, down 0.05% from its previous close of 98.044.