Indian Stocks Cap Biggest Weekly Loss in Month on Global Selloffby
India’s benchmark stock index capped its second week of declines amid losses in Asian equities before key U.S. jobs data that may indicate whether the world’s biggest economy can withstand higher borrowing costs.
Dr. Reddy’s Laboratories Ltd. was the worst performer in the S&P BSE Sensex, while Wipro Ltd., a software exporter, retreated to a two-month low. Adani Ports and Special Economic Zone Ltd. slid to about a three-month low. Gail India Ltd. rallied to a 10-month high after CNBC-TV18 reported the largest natural-gas supplier plans to sell its stake in a city-gas distributor. Tata Motors Ltd., owner of Jaguar Land Rover, climbed for a second day
The Sensex lost 0.1 percent at close in Mumbai, paring losses of as much as 0.8 percent. Asian stocks had their steepest weekly drop since the middle of February after comments from Federal Reserve officials that a June rate hike is possible fueled concerns about capital outflows from developing nations. Overseas funds have sold $114 million of Indian shares this month after investing $585 million in April and $4.1 billion in March, which was the biggest inflow in three years.
“Markets remain a tricky place to invest as western central bankers have realized that monetary easing isn’t working any more,” Saurabh Mukherjea, chief executive officer of institutional equities at Ambit Capital Pvt. in Mumbai., said in an interview with Bloomberg TV India. “Caution and risk aversion are my watch words as the outlook is tough. Sensex at 22,000 is still in play,” he said, reiterating a forecast made in August last year.
Adani Ports tumbled 1.7 percent, taking the week’s decline to 18 percent, the biggest loss since October 2008.
ITC lost 2.2 percent this week. The company closed the plants starting May 4, when the Supreme Court ordered transferring to the Karnataka High Court of all petitions challenging the health-warning rules on packs of tobacco products, according to an exchange filing. The factories are shut until the company is in a position to comply with the interim requirements pending hearing in the state court, according to the statement.
Foreign investors sold $4.6 million of local stocks on May 4, trimming this year’s inflows to $1.7 billion. The Sensex has retreated 3.4 percent this year and trades at 15.5 times 12-month projected earnings versus 11.3 for the MSCI Emerging Markets Index.