India’s Sensex Drops for Second Week; Infosys Gains on Earnings

Most Indian stocks fell, with the benchmark index completing a second week of losses. Software exporters rallied after Infosys Ltd. raised its sales forecast and reported earnings that beat estimates.

Infosys, India’s second-largest software exporter, had the biggest gain in three months, sending an industry measure to a record. Larsen & Toubro Ltd., the nation’s biggest engineering company, dropped for a third day. ICICI Bank Ltd. was the worst performer on the S&P BSE Sensex.

About six stocks declined for every three that rose on the Sensex, which advanced 0.2 percent to 20,758.49 at the close in Mumbai. The gauge slid 0.5 percent this week. Infosys earnings marks the beginning of the reporting season, which could be a “mood booster,” Citigroup Global Markets Inc. wrote in a note yesterday. A report later today may show factory output grew 0.8 percent in November, after a 1.8 percent decline in the previous month, 37 economists surveyed by Bloomberg forecast.

“Infosys numbers were satisfactory but uncertainty remains over the other economic data points due in the next few days,” Vaibhav Sanghavi, a director at Ambit Investment Advisors Pvt. in Mumbai, said by telephone today. “Weak global markets also impacted sentiments.”

The MSCI Asia Pacific Index is headed for a second weekly decline, after swinging between gains and losses today as data showed China’s trade surplus narrowed and investors awaited a report on U.S. payrolls. India’s trade deficit in December widened to $10.14 billion from $9.22 billion a month earlier, a report showed today. India will release retail prices data for December on Jan. 13 and wholesale price inflation Jan. 15.

Infosys Guidance

Infosys profit rose to 28.8 billion rupees ($464 million) in the three months ended Dec. 31, beating the 27 billion-rupee median of 37 analysts’ estimates compiled by Bloomberg. Dollar revenue will increase by between 11.5 percent and 12 percent in the year to March, the company said today. That compares with Infosys’ October forecast for growth of 9 percent to 10 percent.

Infosys soared 2.9 percent, the most since Oct. 11, while larger rival Tata Consultancy Services Ltd. gained 1.7 percent to a record. Wipro Ltd. surged 2.3 percent. The 10-member S&P BSE Infotech index, which soared 60 percent last year, gained 2.2 percent to a life-time high.

India’s top three technology companies, which get most of their sales from abroad, were among the five largest gainers on the Sensex in 2013 as growth in developed economies and an 11 percent decline in the rupee boosted the outlook for exporters’ earnings. Global spending on information technology is expected to grow 3.1 percent to $3.8 trillion in 2014, with IT services set to climb 4.5 percent, Gartner Inc. forecast Jan. 6.

Larsen & Toubro fell 1.6 percent to its lowest close since Nov. 21. The stock earlier rose as much as 1.3 percent.

ICICI, Mahindra

ICICI Bank fell 2.5 percent to its lowest level since Nov. 22. Lender Axis Bank Ltd. tumbled 1.8 percent, its eighth day of fall and taking this week’s loss to 7.7 percent, the most on the Sensex. Mahindra & Mahindra Ltd., a maker of tractors and sports utility vehicles, slid 2.2 percent.

Overseas investors bought a net $28.1 million of domestic shares on Jan. 9, data compiled by Bloomberg show. Inflows last year totaled $20 billion, the most in Asia after Japan, and $24.6 billion in 2012, the data show.

The Sensex trades at 13.1 times projected 12-month profits, the cheapest since August, data compiled by Bloomberg show. The measure’s 30-day volatility index, a gauge of price swings, dropped to the lowest level since March yesterday. The MSCI Emerging Markets Index is valued at 10.1 times earnings.

The CNX Nifty Index climbed less than 0.1 percent to 6,171.45, paring an earlier advance of as much as 1.2 percent. The India VIX lost 3.7 percent.

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