Indian Stocks Snap Two-Day Advance as Lenders, Automakers Drop
Indian (SENSEX) stocks declined, with the benchmark index snapping a two-day gain. Shares of lenders and automakers led the decline.
The S&P BSE Sensex index fell 0.3 percent to 19,116.91 at 9:59 a.m. in Mumbai. The gauge climbed to a one-month yesterday amid expectations slowing inflation and lower commodity prices may prompt India’s central bank to reduce borrowing costs next week. HDFC Bank Ltd. (HDFCB), India’s second-largest private lender, slid 1 percent ahead of earnings today. Tata Motors Ltd. (TTMT), the owner of British luxury car brands Jaguar and Land Rover, lost 1.2 percent, ending a four-day rally.
Overseas funds bought a net $292.1 million worth of Indian equities last week, the biggest inflow in five, data compiled by Bloomberg show. That helped the Sensex advance 4.2 percent in its biggest weekly gain since the period ended Nov. 30. The rally pushed up the gauge’s valuation to 12.9 times projected 12-month profits from this year’s low of 12.3 times on April 12, Bloomberg data show.
“The market has had a very good pop and I think we’ll see some consolidation,” Ajay Bodke, head of investment strategy & advisory at Mumbai-based brokerage Prabhudas Lilladher Pvt., said in an interview with Bloomberg TV India.
HDFC Bank slid 1 percent to 691.6 rupees. The lender may report fourth-quarter profit of 18.9 billion rupees, according to a median of 37 analyst estimates in a Bloomberg survey. Tata Motors lost 1.2 percent to 281.9 rupees.
India’s Finance Minister Palaniappan Chidambaram said a further cut in interest rates by the central bank would help revive economic growth. Chidambaram made the comments in an April 19 interview from Washington, where he was attending meetings of the International Monetary Fund and the World Bank.
Stocks also rose last week as data showed wholesale prices slowed to a 40-month low, and slumping oil and gold prices reduced import costs for the two commodities, which contributed to a record current-account gap in the last quarter of 2012.
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