Wipro, Reliance Lead Decline in India's Stocks on Global Recovery Concerns
India’s benchmark stock index fell to the lowest in more than a week following concern the global economic recovery will wane as European nations step up measures to reduce fiscal deficits.
Wipro Ltd., India’s third-biggest software services provider, slid the most in more than a week. Reliance Industries Ltd., the nation’s most valuable company, fell for the third day. The euro dropped to the lowest level in more than four years against the dollar.
“The poison is spreading,” said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. “Investors should hold cash and stay away from stock markets for now.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 159.04, or 0.9 percent, to 16,835.56. The S&P CNX Nifty Index on the National Stock Exchange lost 0.7 percent to 5,059.90. The BSE 200 Index retreated 0.5 percent to 2,149.49.
Wipro declined 3.1 percent to 645.45 rupees. Reliance Industries dropped 2.6 percent to 1,016.55 rupees.
Reliance Communications Ltd., the second-largest wireless operator, retreated 1.9 percent to 141.70 rupees after its fourth-quarter profit dropped 16 percent to 12.2 billion rupees ($267 million). Reliance Infrastructure Ltd., the nation’s third-largest utility, declined 2.8 percent to 997.60 rupees after its net income for the quarter declined 27 percent.
DLF Ltd., India’s biggest developer, sank 3.9 percent to 287.05 rupees, its lowest close since May 7. Fourth-quarter profit of 4.26 billion rupees was less than the 5.4 billion- rupee average of 14 estimates compiled by Bloomberg.
ABB Ltd., the local unit of the world’s largest builder of electricity networks, surged 23 percent to 829.05 rupees. The company said its parent plans to buy an additional 22.89 percent of its stock through an open offer of 900 rupees a share.
European finance ministers return to Brussels today a week after agreeing to a $1 trillion financial lifeline for the euro region. Ministers are under pressure to show they can reduce deficits fast enough to satisfy investors and then police budgets effectively once targets are met. Spain and Portugal have already announced budget cuts.
The MSCI Asia Pacific Index has slumped in the past month as concern mounted that countries in addition to Greece will struggle to repay their debt.
India’s rupee dropped against the dollar for a second day on speculation overseas investors will slow purchases of regional assets after European Central Bank President Jean- Claude Trichet called for a “quantum leap” in the way euro- area nations set their budgets. The Dollar Index climbed to its highest level since March 2009.
“Risk aversion is on the increase again among global investors,” said Sanjay Arya, treasurer at state-owned Bank of Maharashtra in Mumbai.
Overseas investors bought a net 859 million rupees of Indian equities on May 13, increasing their total purchases of the stocks this year to 277.4 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years earlier in domestic currency terms, as the biggest rally in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.
The following were among the most active on the exchange:
Bartronics India Ltd. (BAIL IN) gained 4.5 percent to 146.85 rupees. The provider of identification technology said fourth-quarter group profit surged to 288.4 million rupees from 95.6 million rupees a year ago.
Larsen & Toubro Ltd. (LT IN) climbed 5.1 percent to 1,606.90 rupees. India’s biggest engineering company reported fourth-quarter profit of 14.4 billion rupees in the three months ended March 31, compared with 9.99 billion rupees a year earlier, according to its statement to the Bombay Stock Exchange.
Sutlej Textiles and Industries Ltd. (SUTJ IN), a cloth maker, soared 19 percent to 137.40 rupees after reporting a fourth-quarter profit of 145 million rupees from a 100 million rupee loss a year earlier.
Whirlpool of India Ltd. (KELV IN) jumped 20 percent to a record 241.10 rupees. The local unit of U.S.-based Whirlpool Corp. reported profit rose to 577 million rupees in the three months ended March 31 from 173 million rupees a year earlier.