Most Indian Stocks Fall With Valuations Levels Flashing Caution
An electronic ticker board displays stock figures outside the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Most Indian Stocks Fall With Valuations Levels Flashing Caution

Indian stocks fell after technical indicators came close to flashing a warning sign amid the longest weekly winning streak since November.

The S&P BSE Sensex declined 0.4% to 36,594.33, with the NSE Nifty 50 Index doing the same. Both gauges’ relative strength and 200-day moving averages are close to levels triggering sell signals, after a fourth straight week of gains.

“Valuations can’t be justified by any metric now,” said Amit Khurana, head of research at Dolat Capital Ltd. in Mumbai.

As India’s corporate earnings season commences, the country faces its first economic contraction in 40 years even as signs of recovery emerge with business gradually reopening. Still, the South Asian nation is the third-worst hit by the coronavirus, after the U.S. and Brazil.

Tata Consultancy Services Ltd. gained 0.8% despite posting profit below expectations after the pandemic disrupted its ability to service key clients. Asia’s largest software outsourcing provider is the first of India’s giant IT services companies to report earnings for the three months through June. Wipro Ltd. and Infosys Ltd. are scheduled to post results on Tuesday and Wednesday, respectively.

The yield on the benchmark 10-year government bond slipped two basis points to 5.76%, while the rupee depreciated 0.3% to 75.2050 per U.S. dollar at the end of its worst week in three months.

The Numbers

  • Eleven of 19 sector sub-indexes compiled by BSE Ltd. slipped, led by a gauge of banks
  • Twenty-one Sensex shares fell while nine rose
    • HDFC Ltd. contributed the most to the index decline, slipping 2.9%, Axis Bank Ltd. had the largest fall, dropping 3.1%; Reliance Industries Ltd. provided the biggest boost and had the largest gain, rising 3%

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