Mumbai: Indian stocks declined, extending last week’s retreat, as a sell-off in Asian stocks sapped the demand for riskier assets.
ICICI Bank Ltd., the country’s biggest private lender, plunged the most in a month. NTPC Ltd., India’s biggest power producer, fell to a three-week low. Bharti Airtel Ltd., India’s largest mobile-phone operator, slid for a third day. ITC Ltd., India’s biggest cigarette company, declined to a one-week low.
The S&P BSE Sensex lost 0.7 per cent at 10:49am in India. The gauge has risen 11 per cent from a February low as the risk-on sentiment returned to Asia. Foreigners bought $588 million of local shares last month, adding to March’s inflow of $4.1 billion, which was the most in three years. The yen has soared almost 5 per cent on the final two trading days in April as the Bank of Japan unexpectedly refrained from boosting stimulus amid fading prospects for a US interest-rate increase in June or July.
“It’s the reversal of the yen-carry trade happening because of what Bank of Japan did,” Mehraboon Irani, head of private-client group at Nirmal Bang Securities Ltd., said in an interview with Bloomberg TV India. “75 per cent of the rise which Indian markets saw was due to global factors. If there is a little bit of global uncertainty happening then there is a distinct possibility we may fall off. However, India remains a buy on dips market.”
While a weakening dollar helped boost commodities prices in April by the most since 2010, global stocks’ rebound from a three-year low in February is stumbling as economic data and corporate earnings do little to lift investor sentiment. US consumer spending rose less than economists forecast in March, data showed Friday, wrapping up the weakest quarter in a year for the biggest part of the nation’s economy.
Locally, investors are focused on the ongoing quarterly earnings season to look for signs of economic growth filtering through to company bottom lines. Profits have dropped in four of the past five quarters in the worst run since the global financial crisis. So far in this reporting season, five out of nine Sensex companies that have reported March-quarter results beat or matched analyst estimates.
Foreign investors bought $36 million of local stocks on April 28, taking this year’s inflows to $1.8 billion. The Sensex has retreated 2.6 per cent this year and trades at 15.6 times 12-month projected earnings versus 11.8 for the MSCI Emerging Markets Index.
