India’s benchmark stock index fell for a second day as some investors avoided taking fresh bets before key economic data due this week.
The BSE India Sensitive Index (SENSEX), or Sensex, fell 0.1 percent to 19,409.69 at the close. The gauge changed directions about 20 times and volumes in the measure were 13 percent below the 30- day average, according to data compiled by Bloomberg. Tata Consultancy Services Ltd. (TCS), the largest software maker, dropped to a four-month low. Bharti Airtel Ltd. (BHARTI), the biggest mobile services company, retreated to the lowest close in two weeks.
The government will announce factory production data for October on Dec. 12, inflation figures for November on Dec. 14 and trade numbers by Dec. 15. The Sensex has risen 6.1 percent in the past three weeks as data showing economic growth slowed last quarter to match a three-year low stoked speculation the government will take more steps to boost growth and investment.
“Markets are consolidating after three weeks of gains as investors watch out for key economic data releases this week that will determine further direction,” A.K. Prabhakar, senior vice president at Mumbai-based Anand Rathi Financial Services Ltd., said by telephone.
Prime Minister Manmohan Singh’s government on Dec. 7 won a vote in parliament on allowing foreign investments in retailing, fueling expectations it will move ahead with further reforms. Singh plans to present to lawmakers plans to raise foreign investment cap for the insurance sector, and allow foreigners to buy stakes in pension firms for the first time.
Singh in mid-September opened aviation and retailing to foreigners, and pared fuel subsidies in a wave of policy making aimed at reviving economic growth and averting a downgrade of India’s credit rating.
“With the FDI in retail out of the way, now the crucial bills in question are banking, forward contract (regulations) amendment and the pensions bill, which if passed will most likely boost spirits,” Amar Ambani, head of research at India Infoline Ltd. (IIFL), said by e-mail.
Tata Consultancy dropped 2.1 percent to 1,237.2 rupees, the lowest close since Aug. 6. Bharti fell 1.4 percent to 317.9 rupees, the lowest price since Nov. 26.
Mortgage lender Housing Development Finance Corp. (HDFC) rose 3.4 percent to 865.80 rupees, a record. Sterlite Industries (India) Ltd. (STLT), the biggest copper maker, gained 0.8 percent to 113.95 rupees, erasing an intraday loss of 2.6 percent.
The 30-stock Sensex trades at 15.9 times estimated profit, the highest since February, compared with the MSCI Emerging Markets Index’s 11.8 multiple. The Indian measure’s 14-day relative strength index, a measure of how rapidly prices rose or fell during the period, has been above 70 for the past six trading days, the level some traders use as a signal to sell.
The S&P CNX Nifty Index on the National Stock Exchange of India Ltd. rose less than 0.1 percent to 5,908.9. The broader BSE Mid-Cap Index (BSEMDCAP) added 0.7 percent to 7,116.60, the highest level since April 28, 2011, data compiled by Bloomberg show. The 246-member measure trades at 14.2 times estimated earnings. The NSE CNX Smallcap Index rose 0.3 percent to 3,742.90 for the 13th day, its longest winning run since January 2004.
“Investor focus is beginning to increasingly shift to mid- and-small caps,” Deven Choksey, managing director at K.R. Choksey Shares & Securities Pvt. in Mumbai, said by telephone. “There are a lot of attractive opportunities in that space.”
Overseas funds bought about $393 million of Indian stocks on Dec. 6, taking net purchases in 2012 to $20.9 billion, the most among 10 Asian markets tracked by Bloomberg, excluding China, data compiled by Bloomberg show.
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