India Stocks Volatile as Investors Mull Profits and Valuations
India Stocks Volatile as Investors Mull Profits and Valuations
(Bloomberg) -- Indian stocks swung between gains and losses in a volatile trading day as investors weighed valuations and the quality of quarterly earnings.
The S&P BSE Sensex fell 0.2% to 37,871.52 in Mumbai after sinking as much as 0.9% and gaining as much as 0.7% earlier in the day. The NSE Nifty 50 Index slipped 0.3%, erasing an initial advance. Both measures yesterday capped five-straight days of gains, breaching 70 on their relative strength indexes, a level some investors read as a signal to sell.
Individual investors in India have been driving stocks higher, in part, due to a paucity of significant returns from other asset classes. Still, foreign investors bought net $219.8 million of local equities on Monday, reducing their withdrawals so far this month to net $217.7 million.
“Technically we are at a strong resistance,” said Deepak Jasani, head of retail research at HDFC Securities Ltd. “There may be a small correction and then progress. If the worst doesn’t seem to be happening in terms of company earnings, investors are happy.”
Seven of 10 Nifty 50 companies that have reported results so far have either beaten or met analyst estimates for profits. Larsen & Toubro Ltd. is due to report quarterly earnings later today.
The yield on the benchmark 10-year bond fell by one basis point to 5.82%, while the rupee was little changed at 74.7625 per U.S. dollar.
The Numbers
- Thirteen of 19 sector sub-indexes compiled by BSE Ltd. dropped, led by a gauge of IT service companies.
- Nineteen Sensex shares fell while 11 rose.
- Hindustan Unilever Ltd.’s 3.1% fall was the steepest, while Infosys Ltd. was the biggest drag; Reliance Industries provided the biggest boost to the index, advancing 1.6%, Axis Bank had the biggest gain, rising 7.4%.
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