Among the top concerns, the financial sector stood out. UBS Securities warned that while a full-fledged liquidity crisis was unlikely, the end of a benign liquidity environment meant growth and interest margins will be affected, Nikkei Asian Review reports.
“We re-iterate our concerns on the Indian macro, especially, on deteriorating external sector balance, upside risks to inflation, risks of fiscal slippage, and INR depreciation,” Kotak Securities said in a note.
Regional equities also weakened this month after the latest round of tariffs between China and the U.S. came into effect. Washington imposed tariffs on $200 billion in chinese shipments that took effect on September 24 and Beijing retaliated with duties $60 billion in U.S. imports.
Furthermore, investors took on a more cautious stance ahead of the Reserve Bank of India’s policy meeting next week.
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