 "Sensex drops as TCS, Hindustan Unilever fall")
India's benchmark stock index dropped for a third day after sales at Tata Consultancy Services and Hindustan Unilever missed estimates.
Tata Consultancy, Asia's biggest software-services company, tumbled the most in a year after its quarterly revenue fell short of estimates. Hindustan Unilever, the biggest household products maker, declined for a sixth day after its net income and sales missed estimates. Tata Motors and Coal India fell more than 1.5 per cent each. Hindalco Industries Ltd, the biggest aluminum producer, resumed its rally, while Reliance Industries Ltd, owner of the world's largest refining complex, added 1.1 per cent. The S&P BSE Sensex dropped 0.3 per cent to 26,779.7 at the close in Mumbai, after changing directions at least 20 times. The Sensex fell a third day, the longest losing run in more than a month, after rallying for two weeks through Friday.
So far, two of three Sensex companies that have reported September-quarter results have matched or beaten estimates.
Bihar elections
"The markets are in a consolidation mode and a clear direction will depend on how the rest of the earnings season pans out and the outcome of the Bihar state elections," D K Aggarwal, chairman of SMC Investments Pvt, said by phone from New Delhi. Aggarwal said he favours shares of engineering, power, automobiles, and consumer companies.
The ongoing elections in Bihar are important for prime minister Narendra Modi's efforts to control the upper house of Parliament, where opposition lawmakers have blocked key economic proposals, including a nationwide sales tax. A win would give him momentum in about a dozen more state elections through 2017 that will determine control of the upper house of Parliament. Bihar poll results are due on November 8.
Tata Consultancy's revenue in the September quarter jumped 14 per cent to Rs 27,170 crore ($4.2 billion), still trailing the Rs 27,230 crore estimate in a Bloomberg survey. Net income increased to Rs 6,060 crore, almost matching the estimate of Rs 6,030 crore. The shares plunged 4.4 per cent, the most since October 17, 2014. Nearest rival Infosys Ltd fell for the third day, after the company reduced its annual sales growth forecast in dollar terms on Monday.
JLR in China
Hindustan Unilever on Wednesday reported September-quarter profit of Rs 962 crore, missing the Rs 1,040 crore estimated by analysts. The company reported sales of Rs 7,820 crore, compared with the estimated Rs 8,030 crore. The shares tumbled 1.9 per cent, the most since September 8.
Tata Motors, India's biggest truck maker and owner of Jaguar Land Rover, plunged 2.4 per cent. Jaguar Land Rover deliveries in China dropped 32 per cent in the September quarter, according to an e-mailed statement. Jaguar Land Rover also expects a one-time charge on impact from the Tianjin blast, the e-mail said.
Coal India, the world's biggest producer of coal, lost 1.7 per cent. ICICI Bank Ltd retreated 1.6 per cent.
Hindalco climbed 2.8 per cent, extending October's rally to 25 per cent. Tata Steel Ltd, the biggest producer of steel, added 1.4 per cent to last week's 18 per cent gain. Reliance Industries climbed 1.1 per cent in a third day of gain. Drug maker Lupin Ltd rose 1.9 per cent.
Inflation data
India's wholesale prices fell for the 11th straight month. The index dropped 4.54 per cent in September from a year earlier, more than the 4.42 per cent decline predicted by the median estimate in a Bloomberg survey of 36 economists. The index had fallen 4.95 per cent in August.
Reserve Bank of India (RBI) Governor Raghuram Rajan cut interest rates by a steeper-than-expected 50 basis points in September, and said policy must stay accommodative to the extent possible. Consumer prices gained 4.4 per cent in September, faster than August's 3.7 per cent, yet below RBI's six per cent inflation target for the 13th month.
International investors bought a net $49 million of Indian stocks on October 12 (Monday), taking this year's inflow to $3.9 billion, the most among eight Asian markets tracked by Bloomberg.
The Sensex has fallen 2.6 per cent this year and trades at 15.5 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.2.
