India’s benchmark stock index fell from a 30-month high amid concern valuations have exceeded the outlook for earnings growth.
ICICI Bank Ltd., the country’s second-biggest lender, declined 1.3 percent. Bharti Airtel Ltd., the largest mobile- phone operator, decreased 1.1 percent. Overseas investments into India’s equities have climbed 54 percent this year, driving gains in the Bombay Stock Exchange’s Sensitive Index to make it the most expensive in Asia and the BRIC markets, which include China, Brazil and Russia.
“Rising valuations are a concern that investors allocating money will definitely look at,” said Avinash Gupta, an analyst at Bonanza Portfolio Ltd., a New Delhi-based brokerage. “Investors should have a stock-specific approach.”
The Sensex lost 38.58, or 0.2 percent, to 18,248.92 at 10:20 a.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange dropped 0.2 percent to 5,476. The BSE 200 Index was little changed at 2,331.04.
ICICI Bank Ltd., the country’s second-biggest lender, fell 1.3 percent to 967.2 rupees. The stock had climbed 8.3 percent this month through yesterday.
Bharti decreased 1.1 percent to 324.85 rupees. The shares had climbed 17 percent last month and 7 percent this month through yesterday.
BRIC Premium
The Sensex, which is extending last year’s biggest rally in 18 years, is trading at 17.8 times estimated profit after adding 4.4 percent since the end of 2009. China’s Shanghai Stock Exchange Composite Index trades at 15.5 times, while Brazil’s Bovespa Index is valued at 13.1 and Russia’s Micex Index is at a 7.9 multiple.
Electrosteel Castings Ltd., a maker of steel casings, sank 6.1 percent to 49.95 rupees after saying first-quarter profit dropped 48 percent to 301 million rupees ($6.6 million) from a year earlier.
Overseas funds bought a net 8.29 billion rupees of Indian equities on Aug. 6, the 24th straight day that purchases have exceeded sales, raising their total investments in the stocks this year to 520.1 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.
--Editors: Margo Towie, Reinie Booysen.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net.
To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net
No comments:
Post a Comment