India’s stock benchmark fell, set to snap nine days of gains, as risk appetite ebbed globally and the domestic earnings season got off to a rocky start.
The S&P BSE Sensex slid 0.6% to 40,378.46 as of 10:27 a.m. in Mumbai, while the NSE Nifty 50 Index declined by a similar magnitude. Asian stocks also trended lower as the North American earnings season began and with no sign of a quick end to the stalemate over U.S. fiscal stimulus. Both Indian measures completed their longest winning streak since April 2018 on Tuesday.
“There will be some profit-booking given the big run-up,” said Umesh Mehta, head of research at Samco Securities Ltd., adding that Wipro Ltd.’s results will “further spoil the mood as the earnings season has gotten off to a negative start.”
After market hours on Tuesday, Wipro reported a net income of 24.7 billion rupees ($337 million) for the three months through September versus a consensus estimate of 25.2 billion rupees. The stock plunged as much as 6.9% and has seen rating downgrades by at least three brokers since. Both Nifty 50 firms that have announced earnings so far have missed analyst estimates. Infosys Ltd. is due to release results later today.
Some technical indicators are also signaling that Indian stocks may be set for a pullback. The Sensex index is flirting with its upper Bollinger band -- two standard deviations above its 20-day moving average -- while the gauge’s 14-day relative strength index is about to cross into overbought territory.
Still, the two Indian measures are close to erasing year-to-date losses, supported by inflows of around $821 million into Indian equities from foreign investors this month.
{{/usCountry}}Still, the two Indian measures are close to erasing year-to-date losses, supported by inflows of around $821 million into Indian equities from foreign investors this month.
{{/usCountry}}The yield on benchmark 10-year bonds fell one basis point to 5.89%, while the rupee traded little changed at 73.3775 per dollar.