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Indian Stocks Drop to One-Week Low as Wipro Declines on Earnings

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Oct. 23 (Bloomberg) -- Indian stocks declined, with the benchmark index falling to a one-week low, as quarterly results from Wipro Ltd. and Cairn India Ltd. disappointed investors.

Wipro, the nation’s third-largest software exporter, fell from a 13-year high as analysts at Morgan Stanley and Jefferies LLC said the company’s sales growth trailed that of its peers. Cairn, which runs India’s biggest onshore oilfield, slid the most in two months after its profit missed forecasts. NTPC Ltd. had the largest drop in two weeks.

The S&P BSE Sensex retreated 0.5 percent to 20,767.88, the lowest close since Oct. 17. The BSE-100 Index ended a three-day rally that sent the index to a five-month high yesterday. The Sensex rose to a three-year high on Oct. 21 as more companies in the gauge announced earnings that beat analysts’ forecasts and as foreign investors boosted their holdings. The S&P BSE Infotech Index climbed to a record last week on optimism a weak rupee will help software makers boost their repatriated profits.

“Wipro had run up sharply and investors feel its earnings lack the momentum displayed by its peers,” Mehraboon Irani, principal and head of private client group at Mumbai-based Nirmal Bang Securities Ltd., said on Bloomberg TV India today.

Wipro tumbled 4.3 percent to 492.45 rupees, the most since April 22 and the worst performance on the Sensex. Billionaire Azim Premji’s company said after trading ended yesterday that sales rose 19 percent in the September quarter. That compares with a 32 percent expansion at Infosys Ltd. and a 34 percent gain at Tata Consultancy Services Ltd., the nation’s largest software exporters. Infosys fell 0.5 percent to 3,324.8 rupees and Tata Consultancy lost 1.4 percent to 2,061.15 rupees.

Earnings Scorecard

Cairn slumped 3.5 percent, the most since Aug. 21 and the second-worst performer on the S&P BSE-100 Index. Group profit increased 46 percent to 33.9 billion rupees in the September quarter, missing the 34.1 billion-rupee median of estimates in a Bloomberg survey, Cairn said after trading ended yesterday.

NTPC dropped 2.3 percent to 145.35 rupees, most since Oct. 11. The stock rose to a one-month high yesterday.

Exide Industries Ltd. slid to 126.1 rupees, a one-month low, after the nation’s biggest maker of automotive batteries announced second-quarter profit that missed estimates.

Hero MotoCorp Ltd. gained 0.9 percent to 2,084.85 rupees after India’s biggest motorcycle maker said that second-quarter profit rose 9 percent to 4.81 billion rupees, higher than the 4.53 billion rupees estimated in a Bloomberg survey.

Profits at all nine of the 30 Sensex companies that have posted results for the September quarter have beaten or matched estimates, data compiled by Bloomberg show. About 47 percent of the companies trailed forecasts in the June quarter.

Fund Inflows

Global investors bought a net $129.5 million of stocks on Oct. 22, a 13th day of purchases, data from the regulator show. That took this year’s inflows to a net $15.2 billion, the second-highest after Japan among 10 Asian markets tracked by Bloomberg.

The Sensex has risen 6.9 percent this year and is valued at 14 times estimated 12-month profits, compared with the MSCI Emerging Markets Index’s 10.7 times. The Indian gauge’s 14-day relative strength index climbed to 66.84 yesterday, near the 70-level seen by some investors as a signal to sell.

The 50-stock CNX Nifty Index fell 0.4 percent to 6,178.35.

To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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