Indian (SENSEX) stocks dropped, led by metal producers and software makers, as the benchmark index retreated from a seven-week high amid losses in global equities.
Sesa Sterlite Ltd. (SSLT) posted its biggest three-day decline in more than a month, pacing losses among its peers. Tata Motors Ltd. (TTMT), the owner of Jaguar Land Rover, retreated the most in a week. Tata Consultancy Services Ltd. (TCS), India’s largest software maker, slid from a record.
The S&P BSE Sensex lost 0.5 percent to 21,032.88 at the close. Stocks decreased in Europe and Asia after the Standard & Poor’s 500 Index had its biggest loss in two months yesterday as investors weighed valuations and the outlook for the Federal Reserve’s stimulus. The S&P 500 climbed 30 percent in 2013, the best year since 1997, to close at the highest valuation in four years. The Sensex rose the most since Nov. 25 yesterday.
“Every rally will be used to book profits as investors still don’t have the confidence that economic growth will recover, inflation will come down fast and interest rates will be cut,” P. Phani Sekhar, a fund manager at Angel Broking Ltd., said in an interview today.
Sesa Sterlite tumbled 1.7 percent to 192.55 rupees. Tata Steel Ltd. (TATA), India’s biggest producer of the alloy, plunged 3 percent to 374.35 rupees, the worst performer on the Sensex. The stock has tumbled 12 percent this year after soaring 56 percent in the final three months of 2013.
Tata Motors declined 1.2 percent, the steepest loss since Jan. 3. Power utility NTPC Ltd. slid to a one-week low.
ICICI Bank Ltd. (ICICIBC), the country’s second-biggest lender, lost 1.8 percent, extending this year’s drop to 5.7 percent.
Tata Consultancy, the nation’s largest software exporter, lost 1.8 percent, the most since Nov. 21. Wipro Ltd. (WPRO), the third-biggest software services provider, decreased 1.4 percent, retreating from its highest level since March 2000.
India’s top three technology companies, which get most of their sales from overseas, were among the five largest gainers on the Sensex in 2013 as growth in developed economies and an 11 percent decline in the rupee boosted the outlook for exporters’ earnings.
Reserve Bank of India Governor Raghuram Rajan last month surprised economists by holding the benchmark interest rate at 7.75 percent instead of adding to increases totaling 50 basis points since taking office in September. The authority meets for its next policy review on Jan. 28.
Consumer prices in India climbed 9.87 percent in December, compared with a revised 11.16 percent for November, data showed after the market closed yesterday. The government will release wholesale price data tomorrow, with economists surveyed by Bloomberg estimating the rate slowing to 6.99 percent last month from November’s 7.52 percent.
Overseas funds bought a net $16.2 million of local shares on Jan. 10, data compiled by Bloomberg show. They invested $20 billion last year, the most in Asia after Japan.
The Sensex trades at 13.2 times projected 12-month profits, data compiled by Bloomberg show. The MSCI Emerging Markets Index is valued at 10.2 times earnings.
The CNX Nifty Index fell 0.5 percent to 6,241.85. The India VIX lost 1.3 percent.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at email@example.com