India’s Sensex Has Worst Week in 2 Months on Valuation, Earnings

Indian (SENSEX) stocks declined, with the benchmark index posting its biggest weekly drop since November, amid concern a recent rally has made valuations expensive and after earnings from some companies missed analysts’ forecasts.

The BSE India Sensitive Index, or Sensex, fell 0.5 percent to 19,789.25, according to preliminary closing prices at 3:30 p.m. in Mumbai. It fell 1.6 percent this week. Bharti Airtel Ltd. (BHARTI), the nation’s largest cell-phone operator, slumped 3.2 percent in a seventh day of losses as profit lagged estimates. Oil & Natural Gas Corp. (ONGC) lost 2.2 after rallying 27 percent last month, the biggest monthly increase since May 2009.

The Sensex completed a third month of gains in January as foreign funds purchased a net $3.9 billion of local shares last month, a record for the period, according to data compiled by Bloomberg. The gauge trades at 15.8 times estimated earnings, near the highest level in 12 months, the data show. The MSCI Emerging Markets Index is valued at 10.9 times.

Five out of 17, or 29 percent, of Sensex firms that have announced December-quarter earnings have trailed estimates, compared with 40 percent in the previous two quarters, the data show.

To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net

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