BackSensex falls from three-week high to 27,645.53 as lenders drop
HDFC, Tata Motors and Bajaj Auto were among the worst performers on the Sensex
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Mumbai: Indian stocks dropped, with the benchmark index retreating from a three-week high in volatile trading, as automakers and lenders retreated.
Tata Motors Ltd, owner of Jaguar Land Rover, and Bajaj Auto Ltd, a motorcycle maker, were among the worst performers on the S&P BSE Sensex. Oil and Natural Gas Corp. (ONGC), the largest explorer, declined for the first time in five days. Housing Development Finance Corp. (HDFC), the largest mortgage lender, slid the most in a week and Axis Bank Ltd. retreated 1.1%.
The Sensex fell 0.2% to 27,645.53 at the close, changing direction at least 10 times. Stocks rose on Monday, extending a two-week rally, after a report on the progress of the monsoon strengthened expectations that slowing inflation will allow the central bank to cut rates. Global funds bought $275 million of stocks on 15 May in a second day of purchases, paring this month’s outflows to $448 million, still the highest among eight Asian markets tracked by Bloomberg.
“After yesterday’s uptick, it’s prudent to see amount of consolidation," Gaurang Shah, a vice-president at Geojit BNP Paribas Financial Services Ltd, said in an interview with Bloomberg TV India on Tuesday. “The sell-side figures from the foreign investors seem to have subdued and that’s comforting. The worst is possibly behind us."
The Sensex entered a so-called correction on 7 May after completing a 10% decline from its 29 January record amid concern about the pace of earnings growth and delays in the passage of key economic bills in Parliament.
Policy review
Consumer prices climbed 4.87% in April from a year earlier, slowing from 5.17% in March, data showed last week. Reserve Bank of India governor Raghuram Rajan maintained interest rates at a scheduled review on 7 April as he waited for lenders to pass on two previous rate cuts to customers. The next policy review is on 2 June.
“A 25-basis point cut is already discounted after data on factory production and inflation," Geojit’s Shah said. “There will be excitement if the RBI cuts by 50 basis points."
HDFC lost 2.04%, the first fall in three days, and was the worst performer on the Sensex. Tata Motors decreased 1.95%, Bajaj Auto slid 1.02%. ONGC retreated 1.54%, ending a four-day, 3.9% advance. Today’s declined trimmed Axis Bank’s this year’s gain to 12%
Tata Power Co. Ltd, India’s biggest non-state generator, may report net income of ₹ 77.2 crore in the quarter ended 31 March, versus a loss of ₹ 150 crore a year ago, according to the median of estimates in a Bloomberg survey. The results are due on Tuesday. The stock rose 0.86%.
While eight out of the 14 Sensex firms that have posted results for the March quarter have beaten or matched estimates, the gauge’s earnings may drop for a second straight quarter, forecasts compiled by Bloomberg show.
The Sensex has risen 0.5% this year and trades at 15.3 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 12.4. Bloomberg
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