Indian stocks fell for the first time in six days, led by technology and consumer companies, after benchmark indexes climbed to records in a holiday trading session on Nov. 3.
Tata Consultancy Services Ltd., the biggest software exporter, dragged a gauge of technology companies to the lowest level since Oct. 24. Cigarette maker ITC Ltd. fell to a two-month low, pacing declines among consumer shares. Bank of India jumped 6.3 percent, the most since July 1. ICICI Bank Ltd. dropped the most in a month. Financial markets in India were closed for a holiday yesterday.
The S&P BSE Sensex dropped 1.3 percent to 20,974.79 at the close in Mumbai. The measure’s 14-day relative strength index rose to 70 on Nov. 3, the level seen by some investors as a signal to sell. Foreign funds were net buyers of Indian stocks for a 20th day on Oct. 31, capping a two-month, $4.9-billion buying spree. India’s economy will grow 5 percent in the year through March 2014, the central bank forecast last week, matching the previous year’s expansion, which was the slowest since 2003.
“Though overseas inflows are driving the markets, at the end of the day fundamentals will catch up,” Sajiv Dhawan, managing director of brokerage JV Capital Services, told Bloomberg TV India today. “Domestic institutions and retail investors are not as convinced, as they are feeling the reality on the ground.”
Traders made ceremonial purchases of stocks in a special 75-minute trading session on Nov. 3 to mark Diwali and the start of the Hindu new year. The session is held every year and is deemed the most auspicious time to start investments.
The India HSBC-Markit Services Purchasing Managers Index for October was 47.1, indicating a contraction, data showed today. The index stood at 44.6 in September.
Consumer prices are climbing at an almost 10 percent pace even amid slowing economic growth, hurting the roughly 800 million Indians living on less than $2 per day, as the cost of everything from onions to clothing surges. Prices advanced 9.84 percent in September from a year earlier, data showed last month, the most in a basket of 17 Asia-Pacific economies tracked by Bloomberg. Wholesale inflation was 6.46 percent.
International investors bought a net $290.2 million of Indian stocks on Oct. 31, the most since Sept. 19, taking the month’s inflow to $2.93 billion. They have purchased $16.3 billion of the nation’s shares this year, the highest after Japan among 10 Asian markets tracked by Bloomberg.
Tata Consultancy slid 2.7 percent, the steepest decline since Oct. 17. The S&P BSE Infotech Index fell 1.3 percent, the biggest loss in almost two weeks.
ITC, which has the biggest weighting in the Sensex, slumped 3.5 percent to the lowest level since Sept. 6. The S&P BSE Fast-Moving Consumer Goods Index dropped 2.5 percent to a two-month low.
ICICI Bank fell 3.1 percent, the worst performer on the S&P BSE Bankex, which decreased 1 percent, the most in a week.
Shares of Hero MotoCorp Ltd., India’s largest motorcycle maker, fell 0.9 percent. The company reported on Nov. 1 that October sales rose 18 percent from a year earlier to 625,420 units.
Net incomes at 16 of the 19 companies in the Sensex that have posted results so far exceeded analyst estimates, according to data compiled by Bloomberg. About 47 percent of the 30 companies in the index missed forecasts in the previous quarter.
The Sensex has advanced 8 percent this year, the biggest gain among the four largest emerging markets, and trades at 13.9 times projected 12-month profits, in line with its five-year average. The MSCI Emerging Markets Index is valued at 10.7 times.
The CNX Nifty Index fell 1 percent to 6,253.15 after advancing to an all-time high of 6,317.35 on Nov. 3.