Indian stocks dropped for a fourth day in a shortened trading session amid concern a slowdown in the economy will hurt corporate earnings.
The BSE India Sensitive Index, or Sensex, fell 0.3 percent to 18,618.87 in special Diwali trading in Mumbai, the longest losing streak since Aug. 29. DLF Ltd., the largest developer, retreated to a one-week low after second-quarter profit missed estimates. Tata Motors Ltd., the owner of luxury brands Jaguar and Land Rover, lost 1.1 percent. The 30-stock measure slid 0.1 percent yesterday after factory output unexpectedly contracted in September and the trade deficit widened to a record last month as exports declined, adding to signs that Asia’s third-largest economy is struggling.
“There’s nothing to be bullish about at the moment,” Arun Kejriwal, director at Kejriwal Research & Investment Services Pvt., said by phone today. “The latest data points -- industrial production, exports and some company earnings -- have all disappointed. Plus, the global situation is grim.”
Investors and traders made ceremonial purchases of stocks during the 75-minute session until 5 p.m., marking Diwali, the festival of lights and the start of the Hindu new year, Samvat 2069. The session known as Muhurat trading held every year on Diwali is deemed the most auspicious time to start investments.
The Sensex has climbed 8 percent since last Diwali on Oct. 26, 2011, boosted by purchases by overseas investors, and is the second-best performer this year among benchmark measures in nations with at least $1 trillion in market value, according to data compiled by Bloomberg. The BSE-200 Index rose 10 percent in the period, the data show.
Shares of 17 of the 30 Sensex firms have risen since last year’s Muhurat trading, led by Hindustan Unilever Ltd., the biggest home-products maker, and Tata Motors. Bharti Airtel Ltd. and Jindal Steel & Power Ltd. are among the biggest losers.
“The rally has been superb since last Diwali and perhaps it is time to book some profit,” said Kejriwal.
DLF declined 1.3 percent to 202.85 rupees. Second-quarter group net income slumped 63 percent to 1.38 billion rupees, the company said after market hours yesterday. That compares with a 2.63 billion rupees estimated by analysts.
Tata Motors fell 1.1 percent to 277.55 rupees and Bharti advanced 1.1 percent to 283 rupees.
The S&P CNX Nifty Index on the National Stock Exchange of India fell 0.3 percent to 5,666.95. India VIX, which gauges the cost of protection against losses in the Nifty index, slid 0.3 percent to 14.81.
The NSE and the BSE traded 904 million shares yesterday, equal to the 12-month daily average.
The Sensex has increased 20 percent this year, driven by overseas fund purchases and government policy reforms announced since mid-September to revive economic growth. Foreigners have bought a net $18.6 billion of local shares this year, the most among 10 Asian markets tracked by Bloomberg, excluding China.
Industrial output dropped 0.4 percent from a year earlier after a revised 2.3 percent increase in August, government data showed yesterday. The median of 28 estimates in a Bloomberg News survey was for a 2.8 percent increase. The trade deficit was $20.96 billion in October, the Commerce Ministry said in a separate report yesterday.
Earnings at 12 of the 30 Sensex companies lagged analysts’ estimates for the three months ended September, same as for the June quarter, data compiled by Bloomberg show.
Prime Minister Manmohan Singh started the biggest policy overhaul in a decade on Sept. 13, including fuel-subsidy curbs and a push to spur investment in domestic industries. India needs to take more steps to revive its economy and must correct its weaknesses, Singh said in Mumbai on Nov. 10.
Stock exchanges will remain closed tomorrow.