Most Indian shares fell, with the benchmark index holding near a two-week low, after quarterly earnings from Tata Motors Ltd. to Tech Mahindra Ltd. disappointed and as Asian equities tracked losses in the U.S.
Tata Motors tumbled the most in seven months and Tech Mahindra, a software exporter, had the steepest decline in more than six years. Vedanta Ltd., the largest copper and aluminum refiner, slid to a seven-week low. Axis Bank Ltd. climbed to a two-month high, pacing gains among lenders.
The S&P BSE 500 Index lost 0.1 percent at the close, while the S&P BSE Sensex added 0.1 percent in final 15 minutes of the session after losing 1.6 percent intraday. Foreigners sold $375 million of local stocks so far this month, the most in Asia, on concerns about the pace of earnings growth. While 11 of the 22 Sensex firms that have posted March-quarter results have beaten or matched estimates, profits will drop for a second quarter, data compiled by Bloomberg show.
“Quarterly earnings are tepid and the market is feeling the ground reality,” Jitendra Panda, chief executive officer at Peerless Securities Ltd., said by telephone from Kolkata. “Stocks of companies that haven’t done well on earnings are getting hammered. They will continue to underperform.”
The MSCI Asia Pacific Index fell a second day, down 0.8 percent as of 12:40 p.m. in London. Standard & Poor’s 500 Index tumbled 1 percent on Tuesday after strong U.S. data bolstered the case for higher interest rates.
The Sensex completed its third weekly gain on Friday, the longest run since March, amid bets that Reserve Bank of India Raghuram Rajan would cut interest rates for a third time this year at the June 2 review. While consumer prices slowed to a four-month low in April, factory output grew 2.1 percent versus an estimated 3 percent rise, official data showed May 12.
“A rate cut will have more of a psychological impact but may not improve corporate profitability hugely,” R.K. Gupta, managing director of Taurus Asset Management Co., which has about $650 million in assets, said by phone from New Delhi.
The India VIX Index rose 1.3 percent to 17.3, the most since May 19. Traders extended 49 percent of their Nifty May futures contracts to June as of 5:11 p.m., data compiled by Bloomberg show, compared with a six-month average of 59 percent before expiry of the monthly derivatives contracts on Thursday.
The 50-stock CNX Nifty Index lost 0.1 percent to 8,334.6. The gauge may end the May series in the 8,350 to 8,400 range, aided by a bout of short-covering on expiry day, Panda said.
The Sensex has risen 0.2 percent this year and trades at
15.2 times projected 12-month earnings, compared with the five-year average of 14.4. The MSCI Emerging Markets Index is valued at a multiple of 12.1.