Indian stocks dropped in volatile trading amid the expiry of derivative contracts on Thursday and after earnings from Oil & Natural Gas Corp. to Tata Global Beverages Ltd. lagged behind estimates.
Oil & Natural Gas, the largest state-owned explorer, fell
1.2 percent, while Hindalco Industries Ltd., the second-biggest aluminum maker, slid for a fifth day after its profit trailed forecasts. Cipla Ltd. retreated to a three-week low, sending a gauge of drugmakers to its fourth day of losses. Mahindra & Mahindra Ltd. extended Wednesday’s 3.2 percent tumble.
The S&P BSE Sensex decreased 0.2 percent to 27,506.71, a two-week low. The gauge erased an intraday gain of 0.4 percent on concerns about the pace of profit growth and as a plunge in Chinese shares dragged emerging-market stocks lower. About 56 percent of the Sensex firms that have so far posted results for the March quarter have missed estimates. In the three months ended December 53 percent missed, and in the September quarter 33 percent did, data compiled by Bloomberg show.
“Earnings have come in weak and the recovery may not set in until the September quarter or later,” Daljeet Kohli, head of research at IndiaNivesh Securities Pvt., told Bloomberg TV India. “Volatility may stay elevated” before the Reserve Bank of India’s policy review on June 2 and the Federal Reserve’s June 16-17 meeting, he said.
Traders rolled over 63 percent of CNX Nifty Index futures contracts with securities expiring in future months as of 4:11 p.m. in Mumbai. The rate compares with a six-month average of 71 percent on the day of expiry, data compiled by Bloomberg show. The gauge lost 0.2 percent to 8,319. Indian derivatives expire on the last Thursday of each month.
Oil & Natural Gas declined 1.2 percent after posting its second profit drop in six quarter amid a slump in oil prices.
Hindalco’s income fell 35 percent to 1.6 billion rupees after a one-time charge, missing the 2.91-billion rupee profit estimated in a Bloomberg survey. The stock lost 1.5 percent, extending the four-day, 4 percent decline.
Tata Global, owner of Tetley tea brand, slid 2.6 percent after a one-time charge depressed fourth-quarter profit to 39 million rupees versus the 919 million rupees estimated in a Bloomberg survey.
Coal India Ltd. added 0.1 percent, extending a two-day rally. The world’s largest producer of the fuel reported profit of 42.4 billion rupees after market hours, trailing the 46.5 billion rupees estimate of 24 analysts in a Bloomberg survey.
Global investors sold a net $81 million of domestic stocks on May 27, paring this year’s inflow to $6.84 billion.
The Sensex is valued at 15.3 times projected 12-month profits, compared with the five-year average of 14.4. The MSCI Emerging Markets Index is valued at a multiple of 12.2.