Indian stocks fell for the first time in three days amid expiry of the futures contracts, led by industrials and consumer companies.
The BSE India Sensitive Index, or Sensex, lost 0.5 percent to 19,323.80 at the close in Mumbai, after changing directions at least 15 times. Volumes on the 30-stock index exceeded the 30-day average by 21 percent. Bharat Heavy Electricals Ltd., the biggest power-equipment maker, fell 1.8 percent. Hindustan Unilever Ltd. and Mahindra & Mahindra Ltd. slid by at least 1 percent each. Reliance Industries Ltd., owner of the world’s largest refining complex, retreated 1.3 percent.
“The market volatility was typical of an expiry day,” Manish Sonthalia, who manages $255 million in equities at Motilal Oswal Asset Management Co. in Mumbai, said by telephone today. “The medium-term direction remains positive and will be determined by how the U.S. addresses the fiscal cliff.”
U.S. lawmakers convene today for budget talks aimed at avoiding more than $600 billion in tax gains and spending cuts scheduled to take effect Jan. 1. The Sensex has increased 25 percent this year, headed for its biggest annual advance since 2009, as government steps to open the economy to offshore investment lured foreign funds.
Overseas funds were net buyers of domestic stocks for a 29th day on Dec. 26, the longest stretch of purchases since a record 41-day streak through Oct. 27, 2010. They have bought a net $24.2 billion of local shares this year, the highest among 10 Asian markets tracked by Bloomberg, excluding China.
“Markets are waiting for a new trigger, which can come in the form of the resolution of the fiscal cliff in the U.S.; after all, global liquidity plays a key role in the performance of our markets,” Kaushik Dani, a fund manager at Peerless Mutual Fund, which has $886 million in assets, said by phone from Mumbai. “Locally, investors will take cues from the December-quarter results.”
Infosys Ltd., the second-largest software exporter, begins the earnings reporting season for Sensex companies, announcing its results for the three months ended December on Jan. 11.
Bharat Heavy Electricals declined 1.8 percent to 226.05 rupees. Hindustan Unilever dropped 1 percent to 518.2 rupees. Mahindra slid 1.5 percent to 930.35 rupees. Reliance retreated 1.3 percent to 817.7 rupees.
Jindal Steel & Power Ltd. shed 1.7 percent to 446.6 rupees. Sterlite Industries (India) Ltd., the biggest copper and zinc producer, tumbled 1.5 percent to 114.2 rupees. Gail India Ltd. declined 1.8 percent to 347.55 rupees.
Tata Motors Ltd., the owner of Jaguar Land Rover, gained 1 percent to 309.2 rupees, extending this year’s rally to 73 percent, making it the best-performing stock on the Sensex. Oil & Natural Gas Corp., India’s largest state-owned oil explorer, added 0.5 percent to 259 rupees.
The rally has pushed up the Sensex’s valuation to 15.3 times estimated earnings, near the highest level since March, data compiled by Bloomberg show. The MSCI Emerging Markets Index is valued at 12 times, the data show.
The S&P CNX Nifty Index on the National Stock Exchange of India decreased 0.6 percent to 5,870.10. The BSE Mid-Cap Index lost 0.5 percent. India VIX, which gauges the cost of protection against losses in the Nifty, tumbled 2.6 percent to 13.74, data compiled by Bloomberg show.
PC Jeweller Ltd. rallied 11 percent in its trading debut. The New Delhi-based company 6.01 billion rupees this month selling 45.1 million shares at 135 rupees each after getting demand for 6.85 times the stock offered.