Indian Stocks Decline to Pare Weekly Advance as Lenders Retreat

  • Reliance slides as concerns about telecom outweigh 2Q profit
  • Bank index caps best week since July after Essar’s $13b deal

Indian stocks dropped, with the benchmark gauge paring a weekly gain, as some investors sold lenders and energy companies after recent advances.

Reliance Industries Ltd., which has a 7 percent weighting on the S&P BSE Sensex, was the biggest drag on the gauge. The stock dropped 2.2 percent, the most in a week. Axis Bank Ltd. was the top loser on the Sensex, while a gauge of lenders capped its best week since July after Essar Group’s $13 billion deal with a group involving Russia’s Rosneft PJSC improved prospects for loan recoveries at local banks.

IndexChangeWeekly Gain
BSE Sensex-0.2%1.5%
NSE Nifty 50-0.1%1.3%
S&P BSE MidCap+0.3%1.4%
S&P BSE Bankex+0.2%4%

Reliance,, owner of the world’s largest refining complex, was among the top losers on the Sensex on Friday despite reporting second-quarter profit that beat estimates. Investors are concerned the increased spending on the company’s new telecommunications venture will be a drag on cash flows from its main oil-refining and chemicals businesses.

Reliance Jio Infocomm Ltd. spent 137 billion rupees ($2 billion) to buy airwaves in the latest round of auctions this month to bolster the 4G phone services it started in September. The company added 16 million users in its first month of operations and said Thursday it may consider extending the free services after December.

“Investors are concerned about the competitive intensity and margin pressure from the telecom business," said G. Chokkalingam, managing director at Mumbai-based Equinomics Research & Advisory Pvt. “The earnings are good and the refining business is doing fine."

The Sensex trades at 16.4 times projected 12-month earnings, compared with a five-year average of 14.3 times. The MSCI Emerging Markets Index is valued at a multiple of 12.5.

Foreign investors sold $44 million of local shares on Oct. 19, paring this year’s inflows to $7.4 billion.

  • Biocon Ltd. advanced 2.8 percent after the company reported a profit of 1.47 billion rupees in the second quarter compared with a loss of 106 million rupees a year ago.

  • ICICI Bank Ltd., the country’s biggest private lender, was the top gainer this week on the Sensex with a 15 percent rally. Asian Paints Ltd. and Hero MotoCorp Ltd. were the top decliners, losing 4.3 percent and 3.5 percent, respectively. 

  • Cement maker ACC Ltd. fell 2.7 percent to a four-month low after its third-quarter net income fell 28 percent from a year earlier. 

  • HCL Technologies Ltd. climbed for the first time in three days after its second-quarter profit beat estimates. 

  • NCC Ltd. soared 12 percent, the most since March 2015, after 2.7 percent of its equity traded in a single block trade. The buyers and sellers were not immediately known.
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