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The benchmark stock index slid to a two- month low, led by industrials and metal companies, as the monthly derivative contracts expired and the US Federal Reserve signaled it's prepared to raise interest rates in December.
Bharat Heavy Electricals, the largest power-equipment producer, tumbled the most in almost two months, while Coal India, the world's biggest miner of the fuel, capped its biggest four-day loss in a month. Axis Bank and State Bank of India paced losses among lenders. Dr Reddy's Lab climbed for the first time in three days before its results, while NTPC slid for a third day even as the biggest power generator posted results that beat forecasts.
The S&P BSE Sensex slid 0.8 per cent to 26,838.14 at the close in Mumbai in a fourth day of drop, the longest stretch of losses since August. The gauge has climbed 2.6 per cent in October, on course for its best month since May, as overseas funds returned to emerging markets amid signals the Fed will delay raising borrowing costs until 2016. Those gains may evaporate if the inflows reverse after the US central bank closes an unprecedented era of near-zero rates in December and Indian company earnings take longer to recover.
"Looks like a December rate hike by the US Fed is pretty much on the cards," Vaibhav Sanghavi, managing director at Ambit Investment Advisors Pvt in Mumbai, said by phone. "Earnings have been a mixed bag so far, some good, some not so good."
Results scorecard
While 69 per cent of the Sensex companies that have posted September-quarter results have matched or beaten estimates, versus with the 60 per cent in the June quarter, earnings for the gauge are set to drop for a second quarter, data compiled by Bloomberg show.
Bharat Heavy tumbled 4.3 per cent, the worst performer on the Sensex, while Coal India extended a three-day, 3.4 per cent retreat.
Axis Bank lost 2.9 per cent, extending Wednesday's 7.5 per cent loss. State Bank capped its biggest four-day loss since September.
Dr Reddy's said after market hours its second quarter rose 26 per cent to Rs 722 crore, beating the Rs 637 crore estimated by analysts. The shares surged 2.6 per cent.
NTPC's second-quarter profit jumped 40 per cent to Rs 2,900 crore ($445 million) from a year ago, beating the Rs 2,020 crore median of 19 estimates in a Bloomberg survey. The stock dropped 1.2 per cent, extending the two-day, 2.6 per cent decline.
Rollovers climb
Meanwhile futures traders extended 61 per cent of the October contracts at expiry, data as of 3:56 pm show. That's higher than the six-month average of 53 per cent. The India VIX index, the benchmark gauge of equity-option prices, jumped 3.2 per cent to 17.6, taking this week's advance to 8.6 per cent.
Global funds were net buyers of Indian stocks for a 12th day on October 27, the longest run of inflows since the period through March 9. They bought a net $10.5 million of stocks, taking this year's purchases to $4.6 billion.
The Sensex has fallen 2.4 per cent this year and trades at 15.6 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.2.
