(Bloomberg) -- Indian stocks declined the most in two weeks led by Reliance Industries Ltd. after UBS AG advised investors to sell the shares.
The Sensex index fell 0.2 percent to 34,771.05 at the close in Mumbai, while the broader NSE Nifty 50 Index dropped 0.4 percent. Reliance Industries Ltd. slid the most in two months after UBS initiated coverage, setting a price target that’s about 8 percent lower than the stock’s Monday closing price. Wipro Ltd., Infosys Ltd. and Tata Consultancy Services Ltd. were among the biggest gainers on both gauges after Morgan Stanley predicted a turnaround in technology spending this year, helping boost company earnings.
The $60 billion that Reliance Industries spent on expanding petroleum coke, gasification, petrochemicals and its telecommunications businesses won’t start generating cash anytime soon to help the company pare its debt, UBS analysts Amit Rustagi and Navin Killa wrote in a note dated Jan. 15. The stock surged 74 percent in the year through Monday.
Read: Mukesh Ambani-Led Reliance Industries Gets A Rare ‘Sell’ Rating
“Indian stock valuations are high, but there are expectations that macro indicators and corporate earnings will improve,” said Sageraj Bariya, vice president of institutional sales at East India Securities Ltd. “Investors’ optimism since the start of the year is boosted by the expectation that quarterly earnings will fuel the rally further.”
The euphoria in equity markets worldwide has lifted the Sensex by 2.1 percent this month to trade at 3.2 times book . With the MSCI Asia Pacific Index trading at 1.75 times, the highest level since 2008, the gap between the two gauges’ ratio is the narrowest in about a year.
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