Indian Stocks Fall Most in 2 Months in U.S. After Exit Polls
By Pooja Thakur
May 13 (Bloomberg) -- Indian stocks trading in the U.S. trading fell the most in two months after exit polls showed the ruling Congress party-led coalition may have won the most seats in elections without securing enough votes to form a government.
ICICI Bank Ltd. and HDFC Bank Ltd., India’s second-and third-largest lenders, slid more than 6 percent on the New York Stock Exchange. Infosys Technologies Ltd. led a decline among computer software companies. The Bank of New York Mellon India ADR index, dropped 5.5 percent to 557.22, the most since March 5. The benchmark Sensitive Index slid 1.1 percent in Mumbai.
“It’s difficult to predict what will happen,” said Greg Lesko, who oversees $500 million at Deltec Asset Management in New York, including Indian financial stocks. “The key is clarity. We’re keeping an underweight on India until after the elections.”
The News X channel forecast the Congress bloc ahead of its chief rival headed by the Bharatiya Janata Party by 199 seats to 191, short of the 272 needed for a majority. Headlines Today and the UTVi business channel broadcast similar figures from exit polls, banned since 714 million voters began casting ballots five weeks ago.
India’s five-phase general election ended today, with counting set for May 16. The majority mark in the Lok Sabha is 272 as two seats in the house are nominated by the president.
The Sensitive Index has climbed 47 percent since its low this year on March 9. The stock market lost a quarter of its value in 2004 following the Congress Party’s decision to join with groups that opposed plans to cut subsidies, sell state assets and fire workers, to form a majority government.
Trade Suspended
Trading was suspended twice on May 17, 2004, after the previous administration, which had said it would hasten the pace of asset sales, failed in its reelection bid. The Sensitive Index and the S&P CNX Nifty Index fell up to the exchange- imposed limits for the first time since the Bombay Stock Exchange was created in 1875.
“It is not clear that the exit polls truly reflect the reality,” said Samir Arora, who oversees an India-focused hedge fund at Helios Capital Management Pte in Singapore. “Although today something will come out, God knows what will happen on Saturday.”
ICICI Bank led declines for banks, losing 6.7 percent to $20.99. HDFC Bank slid 6.2 percent to $73.89.
Infosys, the nation’s second-largest computer-services provider, dropped 4.7 percent to $30.36. Wipro Ltd., the third- biggest software developer, fell 4 percent to $10.10.
Sterlite Industries (India) Ltd., the nation’s largest copper producer and second-best performing stock in Mumbai this year, dropped 6 percent to $9.19 in New York trading.
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