Indian Stocks Retreat as TCS Falls Before Earning Season Starts

Indian stocks slid for a second day, with the benchmark index declining to a one-week low, before the quarterly earnings reporting season begins Thursday.

Tata Consultancy Services Ltd., the nation’s top software exporter, tumbled the most in three weeks before its earnings today. Larsen & Toubro Ltd., the biggest engineering company, lost 1.9 percent, while Dr. Reddy’s Laboratories Ltd. retreated for a third day.

The S&P BSE Sensex fell 0.5 percent to 28,666.04 at the close. The gauge capped a second weekly gain on Friday after the nation’s credit rating outlook was upgraded to positive by Moody’s Investors Service. Estimates for fiscal year to March 2016 profits for Sensex companies have dropped 6 percent since the end of December as investors seek more evidence that Prime Minister Narendra Modi’s efforts to propel growth will lead to a revival in corporate profitability.

“The sharp upmove in the market has been led by improving macros and liquidity, while the micros are yet to catch up,” Mehraboon Irani, head of private-client group at Mumbai-based Nirmal Bang Securities Ltd., said in an interview to Bloomberg TV India. “Now that the earnings season has begun, the micros are coming to the fore. There’s going to be some profit-booking as corporate numbers may not live up to expectation.”

Sensex profits in the three months ended December fell for the first time in six quarters.

TCS Outlook

Tata Consultancy may report profit for the March quarter climbed 1.6 percent from a year earlier to 53.88 billion rupees ($864 million), according to the median estimate of 26 analysts surveyed by Bloomberg. Reliance Industries Ltd., owner of the world’s largest refining complex, reports Friday.

Tata Consultancy fell 1.7 percent, while Infosys lost 0.9 percent. Wipro Ltd., the third-biggest software exporter, fell for a second day, losing 0.8 percent.

Larsen retreated 1.9 percent, while Dr. Reddy’s decreased 2 percent.

Foreign investors bought a net $73.5 million of domestic shares on April 13, taking the year’s inflows to $6.35 billion, the most in Asia. They purchased $16 billion of stocks in 2014.

The Sensex has gained 4.2 percent this year and trades at 16 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 12.6.

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