Indian equities fell for the second day amid concern a weak rupee will undermine the government’s efforts to revive economic growth. Automakers and consumer goods companies led the declines.
Tata Motors Ltd. dropped the most on the benchmark index after its quarterly earnings missed estimates, leading a gauge of automobile companies to its lowest level in four months. ITC Ltd. decreased to a six-week low. Engineering company Larsen & Toubro Ltd. retreated to the lowest price in 14 months.
The S&P BSE Sensex lost 0.4 percent to 18,664.88 at the close, with volume 41 percent higher than the 30-day average. The measure has retreated 4.3 percent in the past month, the second-worst performer among 94 indexes tracked by Bloomberg globally. The rupee weakened toward a record low, threatening to worsen inflation in a nation that imports about 80 percent of its oil and accelerate capital outflows. Foreigners pulled $3 billion from stocks and bonds in July.
“Growth is slipping as companies don’t want to invest in capital expenditure,” Kenneth Andrade, head of investments at IDFC Asset Management Co., which has $6.4 billion in assets, said in an interview with Bloomberg TV India today. “That’s a residual effect of what’s happening with the currency. The macros are deteriorating.”
Tata Motors slumped 3 percent to 278.9 rupees, extending this year’s loss to 11 percent. The owner of Jaguar Land Rover reported first-quarter net income fell to 17.3 billion rupees ($283 million) from 22.4 billion rupees a year earlier, the Mumbai-based company said. That missed the 22.2 billion-rupee median of 39 analysts’ estimates compiled by Bloomberg.
Mahindra & Mahindra Ltd., the nation’s largest producer of tractors and sports utility vehicles, fell 1.4 percent to 842.6 rupees, the lowest close in four months. The 11-member S&P BSE Auto index slid 1.5 percent to the lowest level since April 16. The gauge dropped for the fifth day, the longest losing run in two months, data compiled by Bloomberg show.
About 47 percent of Sensex companies that have reported earnings so far for the June quarter missed analyst estimates. That compares with 27 percent for the three months ended March, and 43 percent in the quarter through December, data compiled by Bloomberg show.
The rupee declined 0.8 percent to 61.30 per dollar at the close. The currency has weakened 11.7 percent in the past three months, the worst among 24 emerging markets after Brazil’s real, and touched an all-time low of 61.8050 yesterday.
ITC, which has the biggest weighting on the Sensex, lost 2.5 percent to 322.1 rupees, its lowest level since June 27. Hindustan Unilever Ltd., India’s biggest household products maker, decreased 0.9 percent to 603.2 rupees.
Larsen & Toubro lost 2.percent to 779 rupees, its lowest price since June 1, 2012. Sun Pharmaceutical Industries Ltd. fell 3 percent to 522.05 rupees.
The Sensex has lost 3.9 percent this year and trades at 13.1 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 9.9 times. The CNX Nifty Index on the National Stock Exchange fell 0.4 percent to 5,519.10. India VIX, which gauges the cost of protection against losses in the Nifty, decreased 3 percent.
Foreign investors bought a net $58 million of domestic shares on Aug. 6, a sixth day of net purchases, data from the regulator show. That takes this year’s inflow to $12.6 billion, the second-biggest among 10 Asian markets tracked by Bloomberg.