India stocks fell as an elusive US stimulus deal kept sentiment muted in the region while investors closely watched local companies’ earnings.

The S&P BSE Sensex lost 1.6% to 40,042.70 as of 2:19 p.m. in Mumbai, while the NSE Nifty 50 Index also declined by the same magnitude.

“It is predominantly global factors at play here with US futures down and investors also want to avoid the U.S. election day uncertainty,” said Kranthi Bathini, an equity strategist at WealthMills Securities Pvt.

Investors remain focused on the chances of an agreement on a stimulus package as November’s election fast approaches. Still, concerns are mounting that surging virus cases could force additional business closures.

At home, economic activity is rebounding, and foreign investors’ net buying of $2.2 billion in local stocks this month is the highest since August. The central bank’s October policy meeting minutes indicated reviving growth is a bigger priority for the newly-appointed monetary policy committee than achieving an inflation target.

“Low interest rates and optimism about company sales picking up during the festive season that began this month are positives supporting the stocks,” said Ravi Singhal, an analyst at Jaipur-based GCL Securities Ltd. “High inflation for an extended period of time remains a key risk while the US election-led volatility may weigh on sentiment during the week.”

In company earnings, 10 out of the 17 Nifty 50 companies that have announced results so far have either met or exceeded expectations.

The rupee weakened 0.3% to 73.8362 per US dollar, while the yield on 10-year government bonds was little changed at 5.84%.

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