Sensex falls to 2-week low as ONGC, Hindalco retreat on weak results
The S&P BSE Sensex declined 0.21%, or 57.95 points, to close at 27,506.71, erasing an intra-day gain of 0.4%
Mumbai: Indian stocks dropped in volatile trading amid the expiry of derivative contracts on Thursday and after earnings from Oil and Natural Gas Corp. Ltd (ONGC) to Tata Global Beverages Ltd lagged behind estimates.
ONGC, the largest state-owned explorer, fell 0.95% to ₹ 328.10, while Hindalco Industries Ltd, the second-biggest aluminium maker, slid for a fifth day after its profit trailed forecasts. Cipla Ltd retreated to a three-week low, sending a gauge of drug makers to its fourth day of losses. Mahindra and Mahindra Ltd extended Wednesday’s 3.2% tumble.
The S&P BSE Sensex decreased 0.21%, or 57.95 points, to 27,506.71, a two-week low. The gauge erased an intra-day gain of 0.4% on concerns about the pace of profit growth and as a plunge in Chinese shares dragged emerging-market stocks lower. About 56% of the Sensex firms that have so far posted results for the March quarter have missed estimates. In the three months ended December 53% missed, and in the September quarter 33% did, data compiled by Bloomberg show.
“Earnings have come in weak and the recovery may not set in until the September quarter or later," Daljeet Kohli, head of research at IndiaNivesh Securities Pvt. Ltd, told Bloomberg TV India. “Volatility may stay elevated" before the Reserve Bank of India’s policy review on 2 June and the Federal Reserve’s 16-17 June meeting, he said.
Traders rolled over 63% of CNX Nifty Index futures contracts with securities expiring in future months as of 4.11pm in Mumbai. The rate compares with a six-month average of 71% on the day of expiry, data compiled by Bloomberg show. The gauge lost 0.2% to 8,319. Indian derivatives expire on the last Thursday of each month.
Earnings scorecard
ONGC declined after posting its second profit drop in six quarter amid a slump in oil prices.
Hindalco’s income fell 35% to ₹ 160 crore after a one-time charge, missing the ₹ 291 crore profit estimated in a Bloomberg survey. The stock lost 1.5%, extending the four-day, 4% decline.
Tata Global, owner of Tetley tea brand, slid 2.59% after a one-time charge depressed fourth-quarter profit to ₹ 3.9 crore versus the ₹ 91.9 crore estimated in a Bloomberg survey.
Coal India Ltd added 0.1%, extending a two-day rally. The world’s largest producer of the fuel reported profit of ₹ 4,240 crore after market hours, trailing the ₹ 4,650 crore estimate of 24 analysts in a Bloomberg survey.
Global investors sold a net $81 million of domestic stocks on 27 May, paring this year’s inflow to $6.84 billion.
The Sensex is valued at 15.3 times projected 12-month profits, compared with the five-year average of 14.4. The MSCI Emerging Markets Index is valued at a multiple of 12.2. Bloomberg
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