How IL&FS default could impact Indian stock markets

Mumbai: The turmoil in India’s non-bank finance companies is deepening, with a troubled lender disclosing further missed debt payments late on Friday and panic seeping into what has been Asia’s best-performing stock market. “This has been done across issuers over last few days.” IL&FS missed interest payments again on Friday, it said in a filing to the stock exchange, causing concern among the myriad investors, including private individuals, who had regarded the group’s debt as rock-solid. India’s central bank and the nation’s market regulator are “closely monitoring recent developments” and are ready to take “appropriate actions,” if necessary, the regulators said in statements released simultaneously on Sunday. “The ongoing elevated volatility is here to stay in the near term,” said Rajesh Cheruvu, chief investment officer at WGC Wealth Management Ltd. “Housing finance companies have seen the pressure due to high valuations as a segment over the past two quarters. We like private sector banks.” “Despite current stresses,” James Syme, a London-based money manager at JO Hambro Capital Management, which oversees over $40 billion in assets, is “comfortable” owning Indian stocks, particularly private sector banks.