INDIA: Indian Equities Resilient to Broader Asia Stock Sell-Off

Indian equities have been resilient to the souring sentiment in Asia, with the Nifty and Sensex indices both little changed on the session. The MSCI Asia Pacific Index declined as much as 1.8% to a one-month low overnight as a deepening rout tech stocks hampers sentiment towards Asian equities. Japanese shares were hit by an extension in the yen’s rally, while weakness in the commodities complex has also contributed to the risk-off tone across markets.

• More broadly, local stocks have slipped from record highs this week amid continued warnings from officials over speculative trading. As part of Finance Minister Sitharaman’s budget on Tuesday, the tax rate on equity derivatives and capital gains from stock investments was raised in a bid to curb the frenzy that’s propelled stock market.
• More recently, India’s revenue secretary said in an interview today that “the futures and options segment is important in the discovery of price but the government doesn’t want to promote speculative trading at the retail level.”
• The rupee has traded on steadier footing today after falling to a fresh low Wednesday amid equity outflows, though Reuters cited sources in noting that pressure was eased by the RBI's intervention. Yields on local bonds are also little changed today as markets look ahead to the RBI rate decision on Aug 8 as the next key domestic risk event.