India’s Sensex Ends Seven-Day Advance as Rally Seen Overdone

Indian stocks declined, led by energy and technology companies, as some investors judged the seven-day rally in the benchmark index to be excessive.

Reliance Industries Ltd. was the biggest loser on the S&P BSE Sensex after the refiner’s employee was among five people arrested by the Delhi police for illicitly procuring government documents. Oil & Natural Gas Corp., the biggest explorer, slid to a nine-month low. ICICI Bank Ltd. was the worst performer on a gauge of lenders. Software exporters Infosys Ltd. and Wipro Ltd. slid the most in at least three weeks.

The Sensex slid 0.8 percent to 29,231.14 at the close in Mumbai, paring the week’s gain to 0.5 percent. The gauge rose 4.4 percent in seven days through yesterday on optimism Finance Minister Arun Jaitley will boost infrastructure spending in his budget presentation on Feb. 28. The rally pushed up valuation to a four-year high and brought the measure within 0.7 percent of its record close on Jan. 29.

“We expect more consolidation as increased expectations only widen the room for disappointment,” Paras Bothra, vice president of equity research at Ashika Stock Broking Ltd. in Mumbai, said by phone. “Today’s profit-booking has tempered the high budget expectations.”

Reliance tumbled 3.2 percent, the most since Jan. 6 and the worst performer on the S&P BSE Oil & Gas Index. The gauge lost 1.8 percent, the most among the 13 sector indexes compiled by the BSE. Oil & Natural Gas fell to 330.7 rupees, the lowest level since May 2.

ICICI Bank lost 2.2 percent. Housing Development Finance Corp. fell 1.5 percent, ending a five-day rally that sent the stock to a record yesterday.

Jindal Steel & Power Ltd. slid 0.6 percent after surging 26 percent on Thursday after winning a coal mine the steelmaker had to surrender last year after a Supreme Court order.

Policy Roadmap

The Sensex has gained 6.3 percent this year on optimism Prime Minister Narendra Modi will simplify tax rules and shift spending from food and fuel subsidies to investments in roads, ports and power plants. Foreign investors have poured more than $7 billion into Indian stocks and bonds so far this year after a record $42 billion worth of purchases in 2014.

Investors are looking at Modi’s first full-year budget to provide a roadmap “on further liberalization of the economy,” Dipen Sheth, the head of research at HDFC Securities Ltd., said by phone from Mumbai. “The budget will be terrific signaling event, and not just an accounting statement.”

The India VIX Index, the benchmark measure of protection against stock-market swings, climbed 4.3 percent. The 50-stock CNX Nifty Index declined 0.7 percent to 8,833.6.

Markets from China to Korea and Hong Kong remained closed today for holidays.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE