6:00 PM Mumbai, India – Foreign investors lower exposure to stocks in India and Asia and chase the prospect of higher rates in the U.S. Wipro agreed to acquire Germany- based cellent AG for €74 million. Aditya Birla Nuvo plans to sell 23% stake in life insurance to Canada-based Sun Life Financial for $252 million.
Stocks on Dalal Street traded lower and the benchmark Sensex index dropped nearly 1%, the largest single-day decline in nearly two weeks.
Stocks in Mumbai and in Asia were on the defensive after the U.S. Federal Reserve Chair Janet Yellen focused on the rising interest rate in a speech.
U.S. interest rates have been steady or in decline for more than a decade and expectations are running high that the central bank will raise rate at the next policy meeting on December 8.
The hot money flow has been leaving Asian markets on the expectations of the higher rates in the U.S. And, foreign investors have been net sellers of stocks in Mumbai.
Foreign investors, the holders of nearly 24% of all outstanding stocks in Mumbai, sold ₹7,000 crore or $1 billion of stocks in November.
The Reserve Bank of India said today it plans to buy up to ₹10,000 crore worth of government bonds through an auction by December 7.
Rupee fell 6 paisa to 66.65 against one U.S. dollar.
The Sensex Index dropped 231.23 or 0.9% to close at 25,886.62. The CNX Nifty slipped 67.20 or 0.9% to 7,864.15.
Gainers & Losers
Aditya Birla Nuvo Limited
edged down 0.5% to ₹2,105.55 after the conglomerate plans to sell 23% stake in life insurance to Canada-based Sun Life Financial for ₹1,664 crore.
dropped 2.4% to ₹556.80 after the signed an agreement with US-based Silver Spring for smart grid business in India.
decreased 2.7% to ₹825 after the multiplex operator plans to sell some of its screens in Delhi to get regulatory clearance for its ₹500 crore acquisition of DT Cinemas.
fell 0.9% to ₹572.15 after the software developer signed an agreement with Landesbank Baden-Wuerttemberg to acquire 100% equity stake in Germany- based cellent AG for €73.5 million.