India's Sensex Caps Second Weekly Retreat Before Earnings Season

  • Gauge falls 2.4% this week, most since period through Feb. 12
  • Foreign investors sell $157 million of local stocks this week

Indian equities capped their biggest weekly decline in two months in a volatile trading session as global funds pared their holdings of the nation’s shares ahead of the start of the quarterly earnings season.

Maruti Suzuki India Ltd., the largest carmaker, slid to a six-week low. Hero MotoCorp Ltd., a motorcyle maker, and Tata Consultancy Services Ltd., the top software exporter, were the worst performers on the S&P BSE Sensex. Lupin Ltd. and Bharat Heavy Electricals Ltd. climbed for a fourth day this week. India Cements Ltd. paced a rally among producers of the building material.

The Sensex was little changed at the close in Mumbai after changing direction at least 20 times. Global funds sold $157 million of local shares this week after plowing $4.1 billion in March, the biggest inflow in three years, amid concerns about the outlook for company earnings. Net incomes for the 30 Sensex members have declined in four of the last five quarters in the worst run since the financial crisis.

“Investors are staying on the sidelines until the earnings season begins,” Kaushik Dani, a fund manager at Karvy Stock Broking Ltd. in Mumbai, said by phone. “Some exhaustion was bound to happen after the March rally.”

Earnings Outlook

The Sensex in March capped its best month since January 2012 as a government pledge to further pare the fiscal gap and speculation of an interest-rate reduction spurred capital inflows. Investor attention shifted back to company earnings after the market discounted the central bank’s interest-rate cut Tuesday that was widely predicted. Analysts estimate profit growth of 3.3 percent in the March-quarter season, which begins next week.

Maruti Suzuki fell 1.2 percent to its lowest level since Feb. 29. Hero MotoCorp tumbled 1.8 percent, the most since Feb. 29. Tata Consultancy lost 1.6 percent to its lowest level since March 18.

Bharat Heavy surged 3 percent to a two-month high, paring this year’s loss to 27 percent. Lupin gained 2 percent, taking this week’s advance to 5.1 percent.

India Cements surged 5.2 percent to its highest level since Feb. 1. ACC Ltd. increased 1.7 percent. Prism Cement Ltd. rallied 3.9 percent to a four-month high. Dalmia Bharat Ltd. jumped 8.3 percent to a record. Ramco Cements Ltd. rallied to an all-time high.

The Sensex has fallen 5.5 percent this year and trades at 15.2 times 12-month projected profits versus 11.6 for the MSCI Emerging Markets Index.

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