Indian Stocks Fall Most in 3 Weeks Amid Expiry, Policy Outcomes

  • Asian stocks decline as BOJ leaves monetary policy unchanged
  • Fed statement softened language highlighting global risks

Indian stocks declined the most in three weeks, tracking global equities, as the Bank of Japan refrained from adding to its monetary policy stance and local monthly derivative contracts lapsed.

Cigarette maker ITC Ltd. slid the most in nearly three months. Bharat Heavy Electricals Ltd., a power-equipment maker, retreated for a second day. Maruti Suzuki India Ltd. and Mahindra & Mahindra Ltd. were among the top losers on the S&P BSE Sensex. HCL Technologies Ltd. plunged the most in 11 weeks after its earnings report.

The Sensex tumbled 1.8 percent the close in Mumbai. The gauge has still risen 12 percent from a February low as the risk-on sentiment returned to Asia. There’s concern that flows into equities may slow after the BOJ held off from adding to its bond-buying program or its budget for exchange-traded stock funds. Earlier, the U.S. Federal Reserve kept its benchmark rate unchanged following a two-day meeting.

“If a global risk-off trade gets underway, then this rally can be cut short as it has been fueled by liquidity," D.K. Aggarwal, chairman of SMC Investments Pvt. in New Delhi, said by phone.

Foreigners have bought $486 million of Indian shares this month, adding to last month’s inflow of $4.1 billion, which was the most in three years.

Global Risks

U.S. central bankers skipped an interest-rate hike for the third straight meeting since kicking off the tightening cycle in December. Their statement suggested they remain positive about the underpinnings of U.S. growth and are less worried -- though not completely reassured -- about risks posed by global economic weakness and financial-market turbulence.

“After eight years of monetary easing and trillions of dollars thrown around the world, we’ve still not seen growth. That is the worrying part,” Andrew Holland, chief executive officer of Mumbai-based Ambit Investment Advisors Pvt. in Mumbai, said in an interview with Bloomberg TV India.

Investors are also focused on the ongoing quarterly earnings season. So far, four out of eight Sensex companies that have ported March-quarter results beat or matched analyst estimates.

Nifty Rollovers

Traders rolled over 70 percent of the NSE Nifty 50 Index futures contracts to the May series that starts Friday, equal to the six-month average, data show. The monthly derivatives futures expire on last Thursday of every month. The Nifty 50 index plunged 1.7 percent, retreating from its highest level since Nov. 5.

ITC tumbled 3.2 percent, the most since Feb. 11. Bharat Heavy decreased 2.2 percent to its lowest level since April 8. Maruti Suzuki and Mahindra both retreated 2.9 percent each.

HCL Technologies tumbled the most since Feb. 9. While the revenue of 107 billion rupees in the March quarter exceeded the 106.7 billion rupees estimate, growth of 1.7 percent in constant currency term was lower than the “street expectation” of 2 to 2.2 percent, Rahul Jain, an analyst at Systematix Shares & Stocks India Ltd., said by phone.

Infosys Ltd., the second-largest technology company, tumbled 2.5 percent, while Wipro Ltd. declined 1.2 percent.

The Sensex has gained 1 percent this month and trades at 15.7 times 12-month projected earnings versus 11.9 for the MSCI Emerging Markets Index.

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