Mumbai: Indian stocks fell for a fourth day as some investors judged the gains in the rupee would hurt earnings that are pegged to the dollar at companies such as Infosys Technologies Ltd and Tata Consultancy.
“The rupee’s gain is hurting all exporters,” said Prateek Agrawal, who oversees $203 million in stocks as head of equities at ABN Amro Asset Management India Ltd in Mumbai. “Also with the earnings season past us, there are no triggers to take the markets higher.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, dropped 92.80, or 0.7% to 13,672.66 as of 1:50 p.m. local time. The S&P/CNX Nifty Index on the National Stock Exchange declined 28.05, or 0.7% to 4,048.95.
Tata Consultancy, the country’s largest software exporter, fell Rs 37.8, or 3%, to 1,230. Infosys, the second- largest, declined Rs 23.85, or 1.2%, to 1,978.5. Satyam Computer Services Ltd., India’s fourth-biggest software services exporter, slid Rs 5.65, or 1.2%, to 450.8.
Ranbaxy Laboratories, the nation’s biggest drugmaker, dropped Rs 4.65, or 1.2% to 384.05.
Indian software companies get more than half their revenue from the US while drugmakers including earn about a third of their revenue from the US.
Oil & Natural Gas Corp., the country’s biggest oil explorer, fell Rs 17.65, or 1.9% , to 904.55. The company’s earnings are pegged to the dollar, CLSA Asia Pacific Markets said in a report dated May 3. For every 1% appreciation in the rupee, Oil & Natural Gas’ earnings are crimped by up to 1.3%, the report said.
The rupee held at a nine-year high. Capital flows into Asia’s fourth largest economy have increased, helping the rupee rise for nine weeks through May 4, the best run since May 2003. It traded at 40.8862 against the dollar at 10:44 a.m. local time.
Overseas investors bought a net Rs 967 million ($23 million) worth of Indian shares on May 7, according to the latest information on the Securities & Exchange Board of India’s Web site.
The following shares rose or fell. Stock symbols are in brackets after company names.
Fortis Healthcare Ltd fell Rs 6.75, or 6.3%, to 101.25. The Indian health-care company founded by the owners of Ranbaxy Laboratories began trading on 9 May. It set the price for its initial stock sale at Rs 108 a share.
Hero Honda Motors Ltd added Rs 8.7, or 1.3%, to Rs 688.25. India’s biggest maker of motorcycles sought a cut in the royalty paid to its Japanese parent Honda Motor Co. for new motorcycles, the Economic Times reported, citing the Indian company’s Managing Director Pawan Munjal. Hero Honda wants a pay a lower royalty to absorb rising inputs cost and interest rates, the report said.
Sundaram Finance Ltd gained Rs 20.45, or 5.2%, to Rs 410.5. Union de Credit pour le Batiment, a unit of BNP Paribas SA, France’s largest bank by market value, said it will acquire a 49.9% stake in Sundaram Home Finance Ltd., a unit of Sundaram Finance, to increase share in India’s growing home mortgage market. The French mortgage lender will pay Rs 1.97 billion for acquiring the stake in the Indian company, according to a statement e-mailed from Chennai and Paris.