Indian Stocks, Rupee, Bonds Decline on Dubai Default Concern
Nov. 27 (Bloomberg) -- India's stocks, currency and bonds fell on concern investors may shy away from riskier emerging market assets over losses stemming from Dubai's attempt to reschedule its debt.
The benchmark Bombay Stock Exchange's Sensitive Index, or Sensex, lost 501.77, or 3 percent, to 16,353.16 as of 1:55 p.m. local time, led by declines in Reliance Industries Ltd. and DLF Ltd. The rupee and bonds retreated, with the currency joining stocks in posting its biggest drop in more than three months.
"The Dubai debacle reinforced the view that any sort of recovery in the global economy is far away," said Devendra Das, fixed-income dealer at Development Credit Bank Ltd. in Mumbai.
Reliance, the nation's most valuable company, declined 3.6 percent. DLF, the largest developer, slid 3.4 percent to 342.2 rupees.
Dubai World, the government investment company, with $59 billion of liabilities, has sought a "standstill" agreement from creditors. The Dubai government's attempt to reschedule debt from creditors, triggering losses in stocks worldwide.
Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world's steepest property slump in the global recession. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG.
Rupee, Bonds
Larsen & Toubro Ltd., the largest engineering company, fell 4 percent to 1,566 rupees. Larsen has as much as $25 million invested in Dubai, ET Now television channel reported earlier. Larsen's investments in Dubai are "not significant," Chairman and Managing Director A. M. Naik said in a telephone interview today.
The rupee weakened 1.3 percent to 47.035 against the U.S. dollar, the biggest drop since Aug. 17. The yield on the 6.9 percent note due July 2019 rose 2 basis points, or 0.02 percentage point, to 7.18 percent, according to the central bank's trading system. The price fell 0.12, or 12 paise per 100 rupee face amount, to 98.03.
"A sharp fall in equity markets in Asia has put pressure on the Indian rupee," said Harish Galipelli, vice president at Kochi-based JRG Wealth Management, which advises traders. "It's happening because of the crisis in Dubai."
To contact the reporters on this story: Pooja Thakur at pthakur@bloomberg.net
Nov. 27 (Bloomberg) -- India's stocks, currency and bonds fell on concern investors may shy away from riskier emerging market assets over losses stemming from Dubai's attempt to reschedule its debt.
The benchmark Bombay Stock Exchange's Sensitive Index, or Sensex, lost 501.77, or 3 percent, to 16,353.16 as of 1:55 p.m. local time, led by declines in Reliance Industries Ltd. and DLF Ltd. The rupee and bonds retreated, with the currency joining stocks in posting its biggest drop in more than three months.
"The Dubai debacle reinforced the view that any sort of recovery in the global economy is far away," said Devendra Das, fixed-income dealer at Development Credit Bank Ltd. in Mumbai.
Reliance, the nation's most valuable company, declined 3.6 percent. DLF, the largest developer, slid 3.4 percent to 342.2 rupees.
Dubai World, the government investment company, with $59 billion of liabilities, has sought a "standstill" agreement from creditors. The Dubai government's attempt to reschedule debt from creditors, triggering losses in stocks worldwide.
Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world's steepest property slump in the global recession. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG.
Rupee, Bonds
Larsen & Toubro Ltd., the largest engineering company, fell 4 percent to 1,566 rupees. Larsen has as much as $25 million invested in Dubai, ET Now television channel reported earlier. Larsen's investments in Dubai are "not significant," Chairman and Managing Director A. M. Naik said in a telephone interview today.
The rupee weakened 1.3 percent to 47.035 against the U.S. dollar, the biggest drop since Aug. 17. The yield on the 6.9 percent note due July 2019 rose 2 basis points, or 0.02 percentage point, to 7.18 percent, according to the central bank's trading system. The price fell 0.12, or 12 paise per 100 rupee face amount, to 98.03.
"A sharp fall in equity markets in Asia has put pressure on the Indian rupee," said Harish Galipelli, vice president at Kochi-based JRG Wealth Management, which advises traders. "It's happening because of the crisis in Dubai."
To contact the reporters on this story: Pooja Thakur at pthakur@bloomberg.net
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