Bloomberg/Mumbai
India’s benchmark stock index fell, ending a three-day rally before the expiry of the derivatives contracts even as foreign investors added to their holdings of local shares.
The S&P BSE Sensex lost 0.1% to 20,147.64, with volume on the gauge about 10% below the 30-day average at the close. Sterlite Industries, the nation’s biggest copper and zinc producer, and State Bank of India, the nation’s largest lender, paced decline among their peers.
The Sensex has risen 3.7% in 2013, climbing to the highest in more than two years on May 17, as easing by global central banks stoked inflows into emerging markets.
Foreigners have purchased a net $14.8bn of local shares this year, a record for the period, data compiled by Bloomberg show. Profit at just seven of the 28 firms in the Sensex that have reported March-quarter earnings so far have trailed estimates, compared with 43% in the three months ended December 31.
“While a minor fall or rise in the index is normal ahead of the expiry, the underlying trend is positive as fund inflows remain quite strong,” D K Aggarwal, chairman of SMC Investments & Advisors, which has about $100mn in assets, said by phone from New Delhi yesterday. “The macroeconomic data and company profits are expected to improve from here.”
India’s gross domestic product increased 4.8% in the three months through March, according to the median of 33 estimates in a Bloomberg survey before data due May 31. Asia’s third-biggest economy grew 4.5% in the previous quarter, the slowest pace since 2009.
Traders rolled over 36% of contracts as of May 28, in line with the three-month average of 37% for a day before expiry, Edelweiss Securities said in a note. Indian derivative contracts end on the final Thursday of every month.
Sterlite tumbled 2.5% to 92.45 rupees. Tata Steel, India’s biggest producer of the alloy, slid 2.3% to Rs314.55, ending a three-day 7.4% gain. Jindal Steel & Power lost 2% to Rs300.2. The S&P BSE India Metal index fell for the first time in four days.
State Bank of India declined 1.1% to Rs2,106.3. ICICI Bank, the country’s second-biggest lender, retreated 1.4% to Rs1,214.9, ending a three-day 5.1% rise. The S&P BSE India Bankex index slid for a second day.
Housing Development Finance Corp, the nation’s biggest mortgage lender, lost 1% to Rs910.55. The stock has advanced 38% in the past year, reaching a record May 27.
Sun Pharmaceutical Industries soared to a record after India’s most valuable drugmaker reported profit that beat estimates and approved a bonus share issue yesterday after the market closed. The stock surged 7% to Rs1,065.75, its biggest climb since May 2009.
Tata Motors increased 2.7% to Rs303.8. India’s biggest automaker reported profit that beat estimates as higher sales at its Jaguar Land Rover luxury unit offset losses at home. Fourth-quarter net income dropped 37% to Rs39.5bn, beating the Rs26.7bn median of 41 analysts’ estimates compiled by Bloomberg.
Oil & Natural Gas Corp rose 0.3% to Rs334.95. India’s largest state explorer said fourth-quarter profit fell 40% to Rs33.9bn, missing analyst estimates.
Drugmaker Cipla rose 1.4% to Rs401.7, ending five days of losses. Fourth-quarter net income dropped 8% to 2.68bn rupees, the company said after close of trading hours. That trailed the 3.29bn rupees estimated by analysts in a Bloomberg survey.
Tata Motors, ONGC and Cipla announced results after the market closed.
The Sensex is valued at 13.9 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s 10.4 times, data compiled by Bloomberg show.
The 50-stock CNX Nifty Index slid 0.1% to 6,104.30. Its May futures settled at 6,090.25. India VIX jumped 4.3%.
