(Bloomberg) -- Indian equities dropped, set for the third day of declines, as investors assessed recent gains in the context of a shrinking economy and increasing coronavirus infections.
The benchmark S&P BSE Sensex fell 0.4% as of 10:21 a.m. in Mumbai, reversing early gains and heading for its lowest close in nearly three weeks. The index is still up more than 45% from a low in March, when it dropped to its lowest since 2016, outperforming the MSCI Asia Pacific Index during this period.
While Asia’s third-largest economy has eased some of the virus-induced restrictions, its outlook is yet to improve after having posted its worst contraction on record in the June quarter. India has now overtaken Brazil as the country with the second-highest number of infections.
“Broader market remains range bound due to virus cases and some local lockdowns still affecting the pace of economic recovery,” said Deven Choksey, managing director at KRChoksey Investment Managers Pvt.
Still, a gauge of metal stocks climbed the most among BSE’s industry groups, tracking a recent increase in prices of industrial commodities. NMDC Ltd. and Vedanta Ltd. led gains on the S&P BSE Metal Index.
“The recovery in metal prices is getting reflected in their stocks but there is no recovery in demand yet,” said Choksey.
Mahindra & Mahindra Ltd. was the worst performer on the Sensex, losing more than 3%.
The yield on India’s benchmark 10-year government bonds rose one basis point to 5.94%, while the rupee was little changed at 73.10 per dollar.
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