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India’s Sensex Drops for Second Day as Metal Producers Decline

July 28 (Bloomberg) -- S&P BSE Sensex retreats to one-week low before expiry of monthly derivative contracts on July 31. * CNX Nifty -0.5%; BSE 100, BSE 500 Indexes -0.5% * Tata Steel -1.6% to lowest in two weeks; Hindalco, India’s

No. 2 aluminum maker, -2.1%; Coal India -3.4%, biggest loss

in 3 weeks and most on Sensex; copper maker Sesa Sterlite

-0.7%; S&P BSE Metals Index -1.5% in 2nd day of losses * Coal India -3.4%, most in 3 weeks and biggest loser on

Sensex * NOTE: Sensex trades at 15.5 times projected 12-month

profits, versus MSCI Emerging Markets Index’s multiple of

11.2; foreign investors bought $61.1m of local shrs on July

24, taking this year’s inflows to $12.1b, most in Asia;

Indian gauge +23% YTD

* “Equity markets in India have had a strong run in India

so much so that Sensex P/E ratio is higher than that for

the S&P 500,” Jan Dehn, London-based head of research

at Ashmore Group Plc, which has ~$70b in emerging-market

assets, told Bloomberg TV India; “Lot of money came in

late after the elections and some of that money is

fairly impatient and short term” * “Equity markets in India have had a strong run in India

so much so that Sensex P/E ratio is higher than that for

the S&P 500,” Jan Dehn, London-based head of research

at Ashmore Group Plc, which has ~$70b in emerging-market

assets, told Bloomberg TV India; “Lot of money came in

late after the elections and some of that money is

fairly impatient and short term”</li></ul> * Wockhardt -7.8%, worst performer on S&P BSE Mid-Cap Index;

stk surged 28% last week * Hindustan Unilever +3.5% after 1Q profit, sales exceed est. * Larsen & Toubro -1%; 1Q sales at India’s largest engineering

co. 103.4b rupees lags behind est. 112.4b rupees; profit

rises 35%, beating est.; co. reports after market hours

* NOTE: 1Q earnings at 7 of 10 Sensex cos. that have

reported results so far have topped or matched analyst

estimates. * NOTE: 1Q earnings at 7 of 10 Sensex cos. that have

reported results so far have topped or matched analyst

estimates.</li></ul> * Open interest in CNX Nifty Index futures falls below past 6- mo. avg amid drop in implied volatility; total OI ~16m vs

avg ~19m two days before expiry; put-call ratio climbs to

0.9 from 0.65 on July 14, which was lowest since Feb. last

year: Bloomberg data

* Drop in implied volatility, rising put-call ratio

signals selling in put options before expiry of monthly

series on July 30, Religare Securities assistant vice

president Manoj Vayalar says by phone from Mumbai;

“trading has been lackluster after the budget in the

absence of fresh triggers” * Drop in implied volatility, rising put-call ratio

signals selling in put options before expiry of monthly

series on July 30, Religare Securities assistant vice

president Manoj Vayalar says by phone from Mumbai;

“trading has been lackluster after the budget in the

absence of fresh triggers”</li></ul> * BSE 100 gainers: Reliance Power +3.6%, ends 3-day retreat,

Glenmark +3.8%, Jaiprakash Associates +3.1%, Bharat Forge

+2.5% * BSE 100 losers: DLF -5.1%, taking 4-day loss to 10.4%; Ambuja Cements -2.8%, Bharat Petroleum Corp -2.8% * Index movers: Consumer Durables +0.6%, Fast-Moving Consumers

Goods +0.4%, IT +0.4%; Metal -1.5%, Oil & Gas -1.3% * Volume above 3-mo. full-day avg: GNP 3.5x 3-mo. avg; GCPL

2.5x, HCLT 1.8x, SHTF 1.7x, CAIR 1.6x, EXID 1.6x, ACEM 1.5x,

TTMT 1.5x, DABUR 1.4x * BSE 500 movers: JKLC +11.3%, SYML +6.7%, IHFL +7.3%, CBOI

+7.4%, BYRCS +6.2%; WPL -7.8%, TRTL -7.6%, IRB -5.6%, VST

-1.5%, HTML -5.6% * Foreigners bought net $61.1m of Indian equities July 24; YTD

total net $12.1b purchases * MXAP Index +0.2% * NOTE: Sensex YTD +23% * NOTE: Mkts closed tomorrow for public holiday

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

To contact the reporter on this story: Santanu Chakraborty in Mumbai at +91-22-6120-3778 or schakrabor11@bloomberg.net To contact the editors responsible for this story: Michael Patterson at +852-2977-4820 or mpatterson10@bloomberg.net Ravil Shirodkar, Phani Varahabhotla

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