Indian stocks declined, paring a weekly advance, as the nation’s biggest power-equipment maker plunged on profit that fell short of estimates.
Bharat Heavy Electricals Ltd. tumbled the most since May, while Coal India Ltd., the largest producer of the fuel, had it’s biggest drop since January. State Bank of India, the nation’s biggest lender, fell the most in two months. Tata Motors Ltd., owner of Jaguar Land Rover, rallied before its quarterly earnings.
The Sensex lost 0.2 percent to 28,236.39 at the close in Mumbai, after changing directions at least 15 times. The gauge rose 0.4 percent this week, after overseas investors bought $234 million of stocks through Wednesday.
“We saw some stock-specific actions based on news flow,” Vaibhav Sanghavi, managing director at Ambit Investment Advisors Pvt. in Mumbai, said by phone. ‘ Local fund flows have been strong, giving support.’’
Domestic investors poured 58.4 billion rupees ($915 million) into local funds in July, extending this fiscal year’s inflows to 381 billion rupees, data from the Association of Mutual Funds of India showed. In the same period last year the inflow was 207.8 billion rupees.
Sanghavi said his funds are long on financials and short on commodities. He also likes shares of industrials, consumer discretionary and automakers.
Indian equities have received $1.1 billion in foreign inflows since July 1, the only Asian market tracked by Bloomberg to see net purchases during the period. Reserve Bank of India Governor Raghuram Rajan on Tuesday left interest rates unchanged, saying he wants to ensure his inflation target of 6 percent by January isn’t at risk.
CLSA Asia-Pacific Markets increased India’s “already substantial overweight” by 2 percentage points while cutting China’s, chief equity strategist Christopher Wood wrote in his Greed & Fear report on Friday, citing the government’s plan to re-capitalize state-run banks.
Bharat Heavy Electricals reported first quarter net income of 338.9 million rupees, missing the 2.1 billion rupees estimated by analysts. Sales at 42.8 billion rupees also missed the estimated 52.8 billion rupees. The shares plunged 5.8 percent, the most since May 6.
Mahindra & Mahindra Ltd., India’s largest maker of utility vehicles and tractors, decreased 0.5 percent. The company’s first quarter sales missed estimates. Net income fell 3.4 percent to 8.52 billion rupees, beating the 7.4 billion rupees estimated by analysts.
Shares of Tata Motors, which reported earnings after trading hours, rose 2.7 percent, the most since July 23. Profit missed estimates as demand for Jaguar Land Rover vehicles slumped in China amid a slowdown. Net income halved to 27.7 billion rupees from 54 billion rupees a year earlier, trailing the 31.4 billion-rupee median of 31 analysts’ estimates compiled by Bloomberg.
Profit at the Jaguar Land Rover unit declined to 492 million pounds ($764 million) from 693 million pounds.
Fifteen of the 23 Sensex companies, or 65 percent, that have posted results for the June quarter have matched or exceeded estimates, versus 40 percent in the March quarter.
Coal India declined 3.9 percent, paring this year’s gains to 8 percent. State Bank lost 2.7 percent, the most since June 3.
The Sensex has risen 2.7 percent and trades at 15.8 times projected 12-month earnings, compared with a multiple of 11.2 for the MSCI Emerging Markets Index.