India’s Sensex Ends Two-Week Rally as Rupee Drops on Global Rout

Indian stocks fell the most in three weeks, with the benchmark index halting two weeks of advance, amid a global equity selloff and on concern local share prices have exceeded the outlook for profit.

Tech Mahindra Ltd. (TECHM) and Titan Co., a maker of watches and jewelry, dropped after their net incomes missed estimates. NTPC Ltd. (NTPC) slid to a two-month low. Larsen & Toubro Ltd. (LT) declined for a fifth day, the longest streak of losses in three months. The rupee fell the most in six months.

The S&P BSE Sensex (SENSEX) tumbled 1.6 percent to 25,480.84 at the close, taking the weekly loss to 2.5 percent. The gauge added 1.9 percent in July, a sixth monthly advance and the longest run of gains since January 2007. Emerging-market stocks headed for the biggest weekly loss in four months as weaker earnings and Argentina’s default reduced investor demand for riskier assets. The Stoxx Europe 600 Index fell 1.4 percent in London.

The decline is a “reflection of what’s happening in the European markets,” Gaurang Shah, vice president at Geojit BNP Paribas Financial Services Ltd., told Bloomberg TV India today. Local stocks can fall a further 3 percent to 4 percent, he said.

Tech Mahindra retreated 1.1 percent to a two-week low. Net income of 6.31 billion rupees trailed the 6.76 billion rupees estimated by analysts. Titan tumbled 4.2 percent, the most in three weeks, after posting profit of 1.77 billion rupees, less than the estimate of 1.95 billion rupees.

Larsen & Toubro tumbled 2.3 percent, extending this week’s retreat to 11 percent, the most on the Sensex. NTPC declined 3 percent, a second day of losses after reporting earnings that missed estimates.

Earnings Scorecard

The Sensex has climbed 20 percent this year, the best performer among the world’s 10 biggest markets, and trades at 15.1 times projected 12-month profits, versus the MSCI Emerging Markets Index’s multiple of 11.

Nine of the 16 Sensex members that have posted earnings for the June quarter have topped or matched forecasts. About 60 percent of companies exceeded or met earnings estimates in the March quarter, compared with 73 percent three months earlier.

“Some of the stocks had moved up sharply and earnings have yet to catch up,” Alex Mathews, head of research with Geojit BNP Paribas Financial Services Ltd., said by phone from Kerala. “That is a bit of a concern for investors.”

All 13 sector indexes compiled by the BSE posted losses, with the S&P BSE Consumer Durables Index falling 3.3 percent, the most since July 8. The BSE Mid-Cap Index slid 0.8 percent, paring the gauge’s gain this year to 36 percent.

The rupee lost 1 percent to close at 61.1850 per dollar, the biggest drop since Jan. 24.

The MSCI World Index declined 0.5 percent, taking losses this week to 2.4 percent. Standard & Poor’s 500 Index slumped 2 percent yesterday, while the Dow Jones Industrial Average lost 1.9 percent to erase the year’s advance as Exxon Mobil Corp. to Micron Technology Inc. tumbled amid disappointing earnings.

Foreigners sold $45.9 million of Indian stocks on July 30, the first net outflow in 10 days. That cut this year’s inflow to $12.1 billion, still the most among eight Asian markets tracked by Bloomberg.

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

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar, Indranil Ghosh

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