India Stocks Mojo Wanes as Sensex Has Longest Losing Run in 2017By
Expensive valuations and a blurred economic outlook have finally begun to weigh on India’s record-breaking stock market.
The benchmark S&P BSE Sensex declined for a seventh day on Wednesday, set for the longest streak of losses since December, as investors pared bets that had so far helped the gauge brush off weak corporate earnings and recent data showing a soft patch in economic growth. Only last week, the gauge had scored its best eight-day run of gains since June 2015.
The Sensex is down 0.8 percent in September amid continuing outflows from global funds and is set for the first back-to-back monthly decline in 2017. The gauge is still Asia’s third-best performer this year and trades at a one-year forward price-earnings ratio of 20. That compares with a multiple of 14.3 for the MSCI Asia Pacific Index.
“The market has had its run and there’s a view that valuations are stretched,” said Jitendra Panda, managing director at Peerless Securities Ltd.
The disruption in supply chains triggered by a sales tax introduced on July 1 will continue to be a drag on the September-quarter earnings season that begins next month, he said.