 "Sensex declines for second day as metal makers retreat")
Vedanta and Hindalco Industries, the largest copper and aluminum producers, slid for a second day this week.
Oil and Natural Gas Corporation fell the most in three weeks, while ITC, the biggest cigarette company, is on course for its first annual loss in seven years. Bharat Heavy Electricals, the top power-equipment maker, slid to a 21-month low.
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The BSE Sensex lost 0.9 per cent to close at 25,887. Asian equities fell for a second day before Yellen's address of Congressional lawmakers on Thursday and November payrolls data on Friday. Global funds pulled $1.1 billion from Indian stocks last month amid an emerging market sell-off, on concern a rate increase in the US would curb demand for riskier assets.
"This is an interesting juncture for the global and local markets as couple of big events are coming up," Mihir Vora, Mumbai-based chief investment officer at Max Life Insurance, which has $4.8 billion in assets, said in an interview with Bloomberg TV India. While there's "a consensus that the Fed will begin to raise rates, it looks like the approach will be more dovish," he said. Vora said he's bullish on road builders, railway contractors, construction-equipment makers and private banks.
Market disruption
In a speech at the Economic Club of Washington, Yellen warned that waiting too long to end the era of near-zero interest rates could force the central bank to tighten too quickly, which would risk disrupting financial markets and the six-year expansion.
She is due to speak before the US Congress and November payrolls data is due Friday, probably the most-anticipated piece of American data before the Fed's December 16 interest-rate decision.
Vedanta decreased 2.3 per cent, ending a two-day, 4.8 per cent advance. Hindalco slid 1.6 percent. Tata Steel tumbled the most since November 23, while Jindal Steel & Power lost 3.2 per cent. ONGC fell 2.6 per cent, the worst performer on Sensex on Thursday. ITC lost 1.7 per cent, taking this year's decline to 6.9 per cent.
Shares of hotels chains and airlines extended gains. EIH, which operates the Oberoi brand of luxury hotels, soared to a one-year high. Indian Hotels, which runs the Taj chain, capped the longest winning streak in a year. Jet Airways India increased to the highest since May 2013. InterGlobe Aviation added 1.3 per cent.
"We're seeing momentum in all aspects of hospitality, be it aviation or hotels," Vineet Bhatnagar, managing director of PhillipCapital India in Mumbai, said in an interview with Bloomberg TV India on Thursday. ''There is a pick-up at the ground level, which is visible in the occupancy rates and airline loadfactors. We're positive about this space with a short-term outlook of three to six months."
Global funds sold a net $22 million of local stocks on December 1. The Sensex has fallen 5.9 per cent this year and trades at 15.3 times projected 12-month profits. The MSCI Emerging Markets Index is valued at a multiple of 11.2.