- Sensex erases gain of as much as 0.8% in last hour of trade
- Stocks have slid in seven of eight sessions on weak earnings
Most Indian stocks dropped, with the benchmark gauge erasing an advance in the last hour of trade, as energy and health-care companies retreated.
ICICI Bank Ltd., the biggest private lender, declined the most in a week. GAIL India Ltd., the largest natural-gas supplier, fell for a second day after its profit missed estimates. Reliance Industries Ltd., owner of the world’s largest oil-refining complex, retreated for the first time in five days. Tata Motors Ltd., the owner of Jaguar Land Rover, rallied to a four-month high, while Coal India Ltd. increased for a third day.
About three stocks dropped for every two that rose on the S&P BSE Sensex, which slid 0.1 percent to 26,552.92 at the close after climbing as much as 0.8 percent earlier. The gauge has declined in seven of the eight trading sessions as earnings of some of India’s biggest companies trailed estimates. Sales at Sensex firms that have posted September-quarter results so far have declined 12 percent from a year earlier even as profits have risen 2.4 percent, data compiled by Bloomberg show.
“The earnings season has not helped and some of the key results are still to come," Alex Mathews, head of research at Geojit BNP, said by phone from the southern state of Kerala. “Besides, no one wants to keep their position open ahead of Bihar election verdict. There are uncertainties and no positive triggers.”
The Bihar elections are important for Prime Minister Narendra Modi’s efforts to control the upper house of parliament, where opposition parties have blocked major economic proposals including a nationwide sales tax. A win would give him momentum in about a dozen more state elections through 2017 that will determine control of the body. The results are due on Sunday.
GAIL India fell 2.1 percent. The company said after market hours on Tuesday that second-quarter profit slumped 66 percent from a year earlier to 4.41 billion rupees ($67 million). That missed the 5.2 billion-rupee median estimate by analysts.
ICICI Bank retreated 2.2 percent. Reliance Industries slid 1.6 percent, ending four days of advance. Tata Motors surged 6 percent, reducing this year’s loss to 17 percent. Coal India added 1.4 percent.
International investors sold a net $57 million of Indian equities on Nov. 3. Foreign funds bought $907 million of local stocks in October, after pulling $2.6 billion in the September quarter, as central banks maintained monetary stimulus and financial-market reform in China assuaged some concerns over the outlook for the world’s second-biggest economy.
The Sensex is valued at 15.6 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 11.5.