Sensex retreats 134 points as TCS falls ahead of March quarter results
Sensex closes 0.5% lower at 28,666.04 points; TCS tumbles most in three weeks before the quarterly results
Mumbai: Indian stocks slid for a second day, with the benchmark index declining to a one-week low, before the quarterly earnings reporting season begins on Thursday.
Tata Consultancy Services Ltd (TCS), the nation’s top software exporter, tumbled the most in three weeks before its earnings on Thursday. Larsen and Toubro Ltd (L&T), the biggest engineering company, lost 1.9%, while Dr. Reddy’s Laboratories Ltd retreated for a third day.
The S&P BSE Sensex fell 0.5%, or 133.65 points, to 28,666.04 at the close. The gauge capped a second weekly gain on Friday after the nation’s credit rating outlook was upgraded to positive by Moody’s Investors Service. Estimates for fiscal year to March 2016 profits for Sensex companies have dropped 6% since the end of December as investors seek more evidence that Prime Minister Narendra Modi’s efforts to propel growth will lead to a revival in corporate profitability.
“The sharp upmove in the market has been led by improving macros and liquidity, while the micros are yet to catch up," Mehraboon Irani, head of private-client group at Mumbai-based Nirmal Bang Securities Ltd, said in an interview to Bloomberg TV India. “Now that the earnings season has begun, the micros are coming to the fore. There’s going to be some profit-booking as corporate numbers may not live up to expectation."
Sensex profits in the three months ended December fell for the first time in six quarters.
TCS may report profit for the March quarter climbed 1.6% from a year earlier to ₹ 5,388 crore, according to the median estimate of 26 analysts surveyed by Bloomberg. Reliance Industries Ltd (RIL), owner of the world’s largest refining complex, reports on Friday.
TCS fell 1.5%, while Infosys Ltd lost 1%. Wipro Ltd, the third-biggest software exporter, fell for a second day, losing 0.87%.
L&T retreated 2%, while Dr. Reddy’s Laboratories decreased 1.92%.
Foreign investors bought a net $73.5 million of domestic shares on 13 April, taking the year’s inflows to $6.35 billion, the most in Asia. They purchased $16 billion of stocks in 2014.
The Sensex has gained 4.2% this year and trades at 16 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 12.6. Bloomberg
Manish Modi in New Delhi contributed to this story.
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