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Most Indian Stocks Drop as Factory Output Falls; Infosys Jumps

Indian (SENSEX) stocks retreated, led by industrials and consumer goods companies, as a contraction in the nation’s factory output countered better-than-expected earnings by Infosys Ltd. (INFO)

About five shares fell for every one that increased on the BSE India Sensitive Index, or Sensex, which lost 0.1 percent to 19,639.34, according to preliminary closing prices in Mumbai. The gauge fell 0.7 percent this week. ITC Ltd. (ITC), India’s biggest cigarette company and Bharat Heavy Electricals Ltd. (BHEL), the top maker of power equipments, retreated more than 2 percent each. Infosys, India’s second-largest software exporter, soared 17 percent after raising its full-year sales forecast.

Industrial output fell 0.1 percent in November from a year earlier, government data showed. The median of 34 estimates in a Bloomberg survey was for a 0.1 percent gain. Foreigners have bought a net $1.4 billion of shares this year, more than three times the level at the same time in 2012, exchange data show. The Sensex closed near a two-year high on Jan. 8.

“While the market is being supported by liquidity from foreign investors there are enough things to worry about on the ground,” Dilip Bhat, joint managing director at Mumbai-based Prabhudas Lilladher Pvt., told Bloomberg TV India today.

The Sensex jumped 26 percent in 2012, its biggest annual gain since 2009, as Prime Minister Manmohan Singh opened the economy to more foreign investments in the past four months to boost an economy growing at the slowest pace in three years and to avert a credit-rating downgrade. The steps prompted offshore funds to invest a net $24.5 billion into domestic shares last year, the highest among 10 Asian markets tracked by Bloomberg.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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