India’s benchmark stock index dropped after its steepest rally in three months as the rupee approached a two-year low amid a slump in the nation’s exports.
Cipla Ltd., one the country’s four biggest pharmaceutical companies, slid from a record. Vedanta Ltd. and Hindalco Industries Ltd., the top copper and aluminum makers, declined at least 2 percent. Reliance Industries Ltd. lost 1.7 percent and Oil & Natural Gas Corp. plunged to a two-year low.
The S&P BSE Sensex lost 0.7 percent to 27,878.27 at the close in Mumbai. The gauge on Friday capped its biggest two-day gain in more than a month after the nation’s two main inflation gauges slowed more than estimated, bolstering expectations of a cut in interest rates. Exports dropped for an eighth month, the longest stretch since 2009, official data showed after market hours on Friday.
“Some investors are taking money off the table after the superb rally on Friday,” Alex Mathews, the head of research at Geojit BNP Paribas Financial Services Ltd., said by phone from Kollam in the southern state of Kerala. “The rupee is down and that’s not helping.”
India’s trade gap widened to $12.8 billion last month as exports fell 10.3 percent from a year earlier, data showed. The rupee weakened 0.5 percent to 65.3375 per dollar at 3:51 p.m. in Mumbai. The currency touched 65.3050 on Friday, the lowest level since September 2013, as China’s yuan devaluation stoked concern of a regional currency war.
“The mood is cautious as there are concerns that yuan may be devalued more,” said Mathews.
Cipla tumbled 4.9 percent in the worst performance on the Sensex on Monday. First-quarter net income more than doubled to 6.51 billion rupees ($100 million), beating the 4.25 billion rupees estimate, the company said after market hours on Friday.
Quarterly earnings at 18 of the 30 Sensex companies, or 60 percent, matched or beat estimates in the June quarter, versus 40 percent in the March quarter.
Vedanta tumbled 2 percent and Hindalco lost 2.7 percent. Reliance slid 1.7 percent, while Oil & Natural Gas dropped 2.4 percent to its lowest level since October 2013.
Bank of Baroda soared 15 percent to a six-month high after the government said after trading ended on Friday that it would inject $3.1 billion into state-run banks. Canara Bank Ltd. rose 13 percent, the most since May 2009, while Bank of India soared 9.1 percent, the most since October 2013.
International investors sold a net $76 million of Indian stocks on Aug. 13, paring this year’s inflows to $6.9 billion.
The Sensex has increased 1.4 percent this year and trades at 15.7 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.