Indian stocks fell for the second day this week as metalmakers slid after Tata Steel Ltd. reported a loss that was bigger than analysts’ estimates.
Tata Steel plunged to a five-week low, while Vedanta Ltd., the nation’s top copper refiner, dropped for the first time in four days. ICICI Bank Ltd., the biggest private lender, slid the most in a week. NTPC Ltd. and Tata Power Co., the largest utilities, dropped at least 0.9 percent. Bajaj Auto Ltd., a motorcycle maker, was the top performer on the S&P BSE Sensex after its sales exceeded estimates.
The S&P BSE Sensex lost 0.1 percent to 27,809.35 at the close, after swinging between a gain of 0.3 percent and a loss of 0.5 percent. The gauge reached a one-month high on Wednesday amid expectations slowing inflation will give Reserve Bank of India Governor Raghuram Rajan room to reduce interest rates for a third time this year at a June 2 meeting.
“A rate cut is expected in June and until then we will see the market trading on newsflow,” Arun Kejriwal, a director at Kejriwal Research and Investment Pvt., said by phone from Mumbai. “The last leg of the earnings season will be crucial in determining the direction of the market.”
Consumer prices in India have come down “tremendously,” Rajan said at an event in New York on Tuesday. One-year swaps slipped to a six-week low Wednesday as Rajan’s comments boosted the odds of a reduction in borrowing costs.
Tata Steel dropped 5.3 percent, taking this year’s loss to 14 percent. The company posted a loss in the three months ended March after writing down assets in the U.K. and as domestic profit margins declined because of record imports.
Bajaj Auto jumped 6.9 percent to its highest level since Feb. 2. The Pune-based company reported fourth-quarter sales of 46.2 billion rupees ($725 million), exceeding the 45.3 billion rupees estimated in a Bloomberg survey. Profit fell 19 percent to 6.22 billion rupees, missing the 6.43-billion rupee estimate.
The company expects to meet the 11 percent exports growth target for the year to March 2016, CNBC-TV18 reported, citing S. Ravikumar, Bajaj Auto’s business development president. The company expects its market share to climb to 24 percent in the fourth quarter of the fiscal year that started April 1, from 18 percent at present, he said.
While nine of the 17 Sensex firms that have posted results for the March quarter have beaten or matched estimates, profits will decline for a second straight quarter, forecasts compiled by Bloomberg show.
ICICI Bank slid 1.6 percent, while Cipla Ltd. declined 2.1 percent. ITC Ltd., the biggest cigarette company, decreased 1.4 percent, a third straight day of losses.
Strides Arcolab Ltd., a drugmaker, soared 8.6 percent, the steepest gain since March 5, after it agreed to buy two pharmaceutical portfolios from Aspen Pharmacare Holdings Ltd., Africa’s largest generic-drug maker, for $301 million. Aspen will also sell a portfolio of six branded products to Strides Singapore for about $92 million.
Foreign investors purchased $37 million of local shares on Wednesday, taking this year’s inflows to $6.8 billion. The Sensex has risen 1.1 percent this year and trades at 15.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 12.3.