India’s benchmark stock index fell for the first time in five days, trimming the largest weekly advance in a month, as some investors judged recent gains exceeded the outlook for earnings growth.
Sterlite Industries (India) Ltd., the nation’s biggest copper producer, slid 2.3 percent after BNP Paribas advised investors to reduce their holdings, citing the risk of earnings disappointments among India’s non-ferrous metal companies. Reliance Infrastructure Ltd., the builder of a mass rapid transit system in Mumbai, lost 4.4 percent.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, retreated 25.77, or 0.1 percent, to 19,966.93 at 3:30 p.m. in Mumbai. The measure posted a weekly gain of 4.3 percent, the most in a month. The S&P CNX Nifty Index on the National Stock Exchange declined 0.3 percent to 5,992.8. The BSE 200 Index dropped 0.6 percent to 2,500.73.
“Investors are a little jittery after seeing the index rise for four straight sessions,” said Arun Kejriwal, a director at Kejriwal Research & Investment Services Pvt. in Mumbai. “People may want to take some money off the table ahead of the weekend.”
Sterlite dropped 2.3 percent to 165.85 rupees, its biggest drop in a week. Reliance Infrastructure slipped for the first time in four days to 836.45 rupees.
DLF Ltd., the country’s biggest real estate developer, shed 4.8 percent to 306.65 rupees after advancing for three straight days. Jaiprakash Associates Ltd., the biggest builder of dams, declined 4.4 percent to 107.4 rupees.
The Sensex fell for past three weeks as inflation in China, Europe’s debt crisis, military tensions on the Korean peninsula and the arrests of eight Indian bank and brokerage officials by the federal investigating agency following a probe into bribes and improper loan disbursals, roiled investor confidence.
The index rebounded this week as government data showed the economy grew 8.9 percent for a second straight quarter. Reports showing an increase in U.S. payrolls and manufacturing instilled more confidence in a global recovery.
“We don’t see this decline as leading to a much deeper correction in Indian stocks,” said D.K. Aggarwal, who manages about $100 million as chairman of SMC Wealth Management Services Ltd. in New Delhi. He is “bullish” on shares of technology, infrastructure and pharmaceutical companies.
Foreign fund flows have almost doubled this year to a record on the expectation spending will boost corporate earnings, driving the 30-member Sensex’s valuation to 18.9 times estimated profit, the most among world’s 10 biggest benchmark gauges.
Overseas funds purchased a net 4.5 billion rupees ($97.7 million) of Indian shares on Dec. 1, taking this year’s record flows to 1.33 trillion rupees, according to data on the website of the Securities and Exchange Board of India.
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