Sensex hits over one-month low ahead of Fed meet

MUMBAI (Reuters) – The BSE Sensex fell on Monday, hitting its lowest in more than one month on profit-taking in stocks heavily owned by foreign investors ahead of the U.S. Federal Reserve’s two-day policy meet starting on Tuesday.

The 30-share benchmark index has seen selling on rallies after hitting a record high of 30,024.74 on March 4, despite the successful completion of coal and telecom airwave auctions and passing key legislation of insurance overhaul by the Modi government.

Traders worry that Fed Chair Janet Yellen may move towards ending an era of near-zero U.S. rates by removing the word “patient” from a post-meeting comment.

Falls also tracked subdued Asian shares after a downbeat session on Wall Street kept sentiment in check, while the euro recovered from a fresh 12-year low touched on the divergent monetary policy paths between the United States and the euro zone.

“India is relatively better placed to weather any negative Fed meeting outcome but some falls cannot be ruled out,” said Deven Choksey, managing director, K R Choksey Securities.

Most of the investors would still be looking to invest in India as inflation and interest rates would remain attractive, he added.

The BSE Sensex fell 0.34 percent after earlier marking its lowest level since Feb. 10, while the broader Nifty lost 0.3 percent.

India’s wholesale prices declined at a much faster-than-expected pace of 2.06 percent on year in February, their fourth straight monthly fall, on the back of plunging global oil prices, government data showed on Monday.

However, data released late on Thursday showed that consumer prices edged up more-than-expected by 5.37 percent in February, marking a third consecutive month of rise.

Stocks heavily owned by foreign investors led the declines. Housing Development Finance Corp (HDFC.NS) fell 1.6 percent while ICICI Bank (ICBK.NS) lost 1.3 percent.

Among other blue-chips, Reliance Industries (RELI.NS) lost 0.9 percent, while ITC (ITC.NS) was down 0.9 percent.

(Reporting by Abhishek Vishnoi; Editing by Anand Basu)

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