The BSE Sensex fell on Tuesday as Tata Motors retreated after monthly sales at Jaguar Land Rover unit disappointed, while Reliance Industries was pressured by profit-taking after quarterly earnings met forecasts.
After surging 7.7 per cent in September, the BSE Sensex has fallen one per cent so far this month, signalling a period of consolidation following the government's fiscal and economic reforms.
Investors now expect more details on how the government will implement these measures, while hoping the Reserve Bank of India will respond to the government measures by cutting interest rates at its policy review on October 30.
Earnings will also be key, with HCL Technologies set to post results tomorrow.
“Actual movement on reforms after so many committee reports is most important even compared to earnings or RBI policy,” said Vivek Mahajan, head of research at Aditya Birla Money.
The BSE index fell 0.7 per cent, or 135.85 points, to 18,577.70 points. The Nifty lost 0.7 per cent, or 39.25 points, to 5,648.00 points.
Reliance Industries shares fell 1.3 per cent as investors booked profits after April-June earnings met forecasts following a rebound in refining margins. HSBC cut Reliance to 'underweight' from 'neutral' saying the Indian energy conglomerate was unlikely to sustain the jump in refining margins, while also citing concerns about the recent rally in share prices. Since its first-quarter earnings results on July 20, Reliance shares had surged 13.9 per cent as of yesterday.
Tata Motors was also among the top decliners, ending down 2.6 per cent, after sales for key unit Jaguar Land Rover fell four per cent in September, marking the first monthly decline since July 2011. Mahindra & Mahindra shares fell 3.8 per cent after Credit Suisse downgraded the stock to ‘neutral’ from ‘outperform’.
Cement stocks were hit by profit-taking ahead of a slew of earnings results due on Thursday. ACC fell 2.9 per cent after surging 13.8 per cent since the start of September. Ambuja Cements shares fell 2.4 per cent after surging 15.8 per cent in the same period. Cement shares had gained on hopes of pick-up in sales as construction activity pick up after monsoon season ends in October.
However, among gainers, Maruti Suzuki shares rose 2.15 per cent after introducing a cheaper, more powerful and fuel-efficient version of its Alto at a base price of Rs 2,44,000, which analysts say could boost its sales.
