India’s benchmark stock index headed for a six-week low, led by metal producers and lenders, as some investors sold companies most tied to the economy before the start of the quarterly earnings season this week.
Hindalco Industries Ltd. (HNDL), India’s second-biggest aluminum maker, was set for a four-month low and was the worst performer on an index of metal stocks. Housing Development Finance Corp. (HDFC), the biggest mortgage lender, retreated the most in seven weeks. Infosys Ltd. (INFO) paced gains among software exporters.
The S&P BSE Sensex (SENSEX) lost 0.5 percent to 26,428.43 at 11:06 a.m. in Mumbai, poised for the lowest close since Aug. 22. The nation’s manufacturing in September grew at the slowest pace in nine months, according to data released Oct. 1 by HSBC Holdings Plc and Markit Economics. Indians markets were closed from Oct. 2 through Oct. 6. Infosys will begin the reporting season for the September quarter on Oct. 10.
“Investors are realigning their portfolios toward sectors where there’s greater predictability of earnings from cyclicals and thematics,” Vaibhav Sanghavi, managing director of Ambit Investment Advisors Pvt., said by phone from Mumbai. “It will take at least two quarters for sectors tied to the economy to catch up.”
Net income for the 30 Sensex companies may increase 10 percent from a year earlier, according to a report by Kotak Securities Ltd. dated Oct. 3.
Hindalco tumbled 4.3 percent, the most on the Sensex. Sesa Sterlite Ltd., India’s largest copper maker, lost 2.8 percent. Housing Development Finance decreased 2.7 percent. HDFC Bank Ltd., (HDFCB) the most valuable lender, slid 1.3 percent.
Infosys increased 1 percent, while larger rival Tata Consultancy Services Ltd. (TCS) gained 0.5 percent. Wipro Ltd., the third-biggest software services provider, added 0.4 percent.
The Sensex has increased 25 percent this year, the best performer among the world’s 10 biggest markets, and is valued at 15.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.9.
International investors have bought a net $ 13.8 billion of Indian stocks this year, the most among eight Asian markets tracked by Bloomberg.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar, Phani Varahabhotla