Most Indian Stocks Decline as Automakers Retreat on Weaker Sales

Most Indian stocks dropped, with the benchmark index closing near an all-time high. Automakers fell after sales declined last month, outweighing gains in lenders and healthcare companies.

Hero MotoCorp Ltd., the nation’s biggest motorcycle maker, and Mahindra & Mahindra Ltd. had the biggest fall in two weeks, sending the S&P BSE Auto Index to its first loss in five days. Bank of Baroda rose the most in six weeks, helping an index of lenders climb to a record.

Three stocks fell for every two that rose on the S&P BSE Sensex, which dropped less than 0.1 percent to 27,860.38 after changing direction at least 12 times. The Sensex increased 4.6 percent to a record 27,865.83 last month amid optimism Prime Minister Narendra Modi will accelerate reforms to spur growth. The rally drove up the index’s 14-day relative strength index to an eight-week high on Oct. 31, a sign to some investors that the rally has gone too far.

“While the long-term momentum remains intact, we can see some profit booking as the monthly auto sales numbers are short of expectations,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said in an interview today. “The markets are overbought in the short term.”

Hero MotoCorp decreased 1.7 percent, the most since Oct. 16, after its sales fell 8 percent last month. Mahindra decreased 3 percent, after rising 3.4 percent last week, as it sold 15 percent fewer tractors and sports-utility vehicles.

Maruti Suzuki India Ltd. retreated 1.5 percent, ending a three-day advance, after its October sales dropped 1.1 percent to 103,973 units from a year earlier. Tata Motors Ltd. fell 0.8 percent. The company sold 17 percent fewer vehicles last month from a year earlier.

Sensex Performers

Hero, Mahindra, Maruti and Tata Motors were among the 10 biggest decliners on the Sensex.

GAIL India Ltd., the largest natural-gas supplier, slumped the most since May. The stock was the biggest decliner on the Sensex as CLSA Asia-Pacific Markets cut its rating to sell from outperformer, citing valuation. The stock surged 9.8 percent last week.

Global investors bought a net $310.5 million of domestic shares on Oct. 31, taking this year’s purchases to $14 billion, the most among eight Asian markets tracked by Bloomberg.

The inflows have pushed up the Sensex 32 percent in 2014, the best performer among the world’s 10 biggest markets. The gauge trades at 15.9 times projected 12-month profits, versus the MSCI Emerging Markets Index’s multiple of 11.

Indian markets are closed tomorrow for a holiday.

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