Sensex Drops a Second Week Amid India Election, Company Earnings

(Bloomberg) -- Indian equities fell, reversing gains that lasted most of the day and causing the benchmark index to drop for a second straight week, the first time that’s happened in more than six months.

The S&P BSE Sensex slipped 0.1 percent to 38,963.26 at the 3:30 p.m. close in Mumbai, erasing a gain of as much as 0.5 percent earlier. The NSE Nifty 50 Index retreated by a similar magnitude.

Indian investors are gripped with uncertainty around the outcome of the national election that’s ongoing through most of this month. They are also closely watching the quality of companies’ first-quarter earnings reports with the Sensex less than 1 percent below its record high set on April 16.

Strategist View

  • “Other than elections, the major factors that will affect Indian stocks are the rainfall, recovery in car and bike sales, oil prices and the trend of quarterly earnings,” said Viral Berawala, chief investment officer at Essel Finance Asset Management Ltd.
  • Equities can extend gains if there is a clear majority government after the elections, he said.

The Numbers

  • Eight of the 19 sector indexes compiled by BSE Ltd. declined, led by a gauge of software services exporters. The Indian rupee rose 0.1 percent against the dollar, extending its four-day gain to 1.4 percent. The S&P BSE Realty Index’s 1.6 percent rise was the steepest.
  • Twenty-four of the 31 Sensex members and 26 of the 50 Nifty companies advanced.
  • Tata Consultancy Services Ltd. -- Asia’s biggest software exporter -- dropped 3.8 percent, the most among the 50 Nifty companies.
  • Net incomes at 11 of the 15 Nifty companies that have reported earnings so far have either topped or met the analyst estimates, according to data compiled by Bloomberg.
    • Consumer-goods behemoth Hindustan Unilever Ltd. reports its fourth-quarter earnings later today.

Analyst Notes/Market-Related Stories

  • A $42 Billion Slump Makes Auto Stocks the Worst Sector in India
  • L&T Finance Cut to Underperform at Credit Suisse; PT 110 Rupees

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