India's Sensex Fluctuates Before Growth Data, Quarterly Earnings

  • GDP growth seen slowing to 7.1% in final three months of 2015
  • Most Asian markets closed for Lunar New Year holidays

A late selloff in technology and consumer companies sent the benchmark stock index to its steepest fall in three weeks as European markets tumbled and oil fell for a third day.

Tata Consultancy Services Ltd. and Infosys Ltd., the nation’s biggest software exporters, dropped at least 2 percent. ITC Ltd., the largest cigarette company, retreated the most in a month, while Hindustan Unilever Ltd. ended a three-day, 5.6 percent gain. Tata Motors Ltd., owner of Jaguar Land Rover, was the worst performer on the S&P BSE Sensex.

The Sensex lost 1.3 percent at the 3:30 p.m. close in Mumbai, with majority of the losses coming after European equities began trading. The Stoxx Europe 600 Index tumbled 2.3 percent in London, while futures pointed to declines in U.S. shares. Indian stocks posted their steepest January losses since 2011 as a China-led turmoil in emerging markets led to the biggest outflows from local equities in five months.

“Indian markets will remain at the mercy of money flows," Joe Rundle, head of trading at ETX Capital, said in an interview to Bloomberg TV India. “People are ripping money out of emerging markets and India is getting dragged with those outflows.”

Overseas funds have pulled out $1.7 billion from Indian equities since Jan. 1, dragging the Sensex down 7 percent and making the rupee Asia’s worst-performing currency this year. They bought $3.3 billion of shares last year, the smallest inflow since 2011, data compiled by Bloomberg show.

The turmoil in global markets has coincided with Asia’s third-biggest economy losing steam. A Bloomberg survey showed economic expansion for the quarter ended December will probably slow to 7.1 percent from 7.4 percent in the prior period. The data is due later today. Investor focus has turned to the federal budget on Feb. 29 after the Reserve Bank of India said he wants to see policies aimed at relieving supply bottlenecks and fiscal consolidation.

“Now that the RBI hasn’t done much, the onus has shifted to the government to take complete responsibility for announcing measures to boost growth,” Chokkalingam G., managing director at Equinomics Research & Advisory Pvt. in Mumbai, said in an interview with Bloomberg TV India.

Investors are also awaiting fiscal third-quarter earnings from some of India’s biggest companies including Tata Motors and State Bank of India this week. So far, 10 out of 18 Sensex firms have posted earnings for the December quarter that have beaten estimates. Fifty-seven percent of companies in the September quarter posted earnings that matched or beat estimates, versus 60 percent in June, data compiled by Bloomberg show.

Tata Motors plunged 4 percent, the most since Jan. 7. Oil & Natural Gas Corp., the largest state-run explorer, retreated 2.7 percent, extending this year’s loss to about 12 percent. ITC fell for a fourth time in five days and Hindustan Unilever dropped 1.9 percent.

Tata Consultancy Services slid the most since Nov. 13, while Infosys had the steepest fall in a month.

The Sensex trades at 14.9 times its projected 12-month earnings, near the cheapest since September, versus a multiple of 10.8 for the MSCI Emerging Markets Index. Most regional markets are closed for the lunar new year.

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