India’s stocks fell for the first time in eight days, led by Reliance Industries Ltd., as Chairman Mukesh Ambani concluded a speech at a shareholders’ meeting without his brother, eroding speculation the two had put aside a five-year feud and would reconcile publicly.
Reliance Industries, India’s largest company by market value, declined the most since June 7. Reliance Infrastructure Ltd., controlled by younger brother Anil, fell the most in a month.
“The falling stocks today are a knee-jerk reaction to all the expectation that was being built upon a public display of truce,” said Taina Erajuuri, who helps manage the equivalent of $1.2 billion of emerging market stocks at Helsinki-based Fim Asset Management, including Reliance Industries’ shares.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, dropped 45.87, or 0.3 percent, to 17,570.82. The gauge has climbed 3 percent this week, its biggest weekly advance in more than three months.
The S&P CNX Nifty Index on the National Stock Exchange fell 0.2 percent to 5,262.60. The BSE 200 Index retreated 0.4 percent to 2,215.67.
Reliance Industries lost 1.6 percent to 1,054.35 rupees. The stock had risen as much as 1.7 percent before the shareholders meeting started. Reliance Infrastructure fell 3 percent to 1,163.10 rupees.
Among other companies controlled by Anil, Reliance Power Ltd. fell 3.6 percent, Reliance Communications Ltd. dropped 3.7 percent and Reliance Capital Ltd. dropped 3.9 percent. Reliance Natural Resources Ltd. fell 7.4 percent, the most since May 7.
The shareholder meeting took place five years after the Ambani brothers split the business group founded by their father, initiating years of squabbles and lawsuits as their business interests clashed. Indian newspapers had speculated about a rapprochement since the brothers scrapped a non-competition accord last month, removing curbs on investments.
Newspapers including Hindustan Times had reported that Anil may attend the meeting, ending a feud that delayed investments in roads, power and telecommunications ventures.
Larsen & Toubro, an engineering company, advanced as investors bought shares of companies linked to the nation’s demand. The nation’s economy can grow by as much as 10 percent annually in coming years, Chakravarthy Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, said yesterday.
“If you look at the quality of stocks that investors have been buying, it’s a play on the domestic growth story,” said Gajendra Nagpal, chief executive officer at Unicon Financial Intermediaries Pvt. in New Delhi. “A correction will have limited downside.”
Larsen & Toubro gained 1.2 percent to 1,798.50 rupees, its highest close since Feb. 6, 2008. Tata Power advanced 0.7 percent to 1,270 rupees.
There’s a “clear signal” that India can achieve a forecast annual gross domestic product growth rate of between 9 percent and 10 percent, Rangarajan said yesterday. That compares with last year’s 7.4 percent pace. India in May said it plans to set up a 500 billion rupee ($10.8 billion) debt fund to upgrade infrastructure and fuel growth.
Overseas funds bought a net 8.58 billion rupees of Indian equities June 16, increasing total purchases of the stocks this year to 249.7 billion rupees, according to the nation’s market regulator.