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Stocks retreated for the third day, led by shares of software exporters and metal producers before the start of the quarterly earnings season.
Tata Consultancy Services (TCS) fell for a third day before the nation's biggest software services exporter posts results for the quarter ended June. Tata Motors tumbled to a 15-month low amid concern that China sales of its Jaguar Land Rover unit might get slow. Vedanta, the biggest copper producer, plunged to its lowest level since August 2013. Larsen & Toubro and Bharat Heavy Electricals, among the nation's largest engineering companies, both rallied to a four-month high.
The S&P BSE Sensex lost 0.4 per cent to close at nearly 27,574, on Thursday, after swinging between gains and losses at least 20 times. TCS was due to kick off the earnings-reporting season for the quarter ended June for Sensex companies after the market close on Thursday.
"The markets are volatile because investors are looking for clarity on Greece, China, corporate earnings, the monsoon and reforms," Vaibhav Sanghavi, managing director at Ambit Investment Advisors, said by telephone in Mumbai. "The earnings season will be closely watched."
The MSCI Asia Pacific Index climbed on Thursday, as Chinese equity gauges rebounded, with more than half of mainland stocks suspended. Greece's government, which extended capital controls through Monday, is rushing to pull together a detailed economic package to convince European leaders it can keep the euro.
Locally, concern over inflation has resurfaced as potentially deficient monsoon rains threaten to hurt crops and stoke food costs, which make up about half of India's consumer price inflation basket. The national weather bureau predicts the June-September showers will be 88 per cent of a 50-year average this year. Rainfall has been four per cent below normal since June 1.
TCS decreased 2.8 per cent, the most since April 17. The company's profit will probably climb nine per cent from a year earlier to Rs 55.1 billion ($867 million), according to the median estimate of 27 analysts in a Bloomberg survey. Infosys, the company's nearest competitor, fell two per cent, in a fourth day of decline. Wipro, the third-biggest software services provider, lost 1.4 per cent.
Forty per cent of the Sensex's 30 companies beat or matched profit estimates in the March quarter, compared with 47 per cent in the October-December period and 67 per cent in the three months to September, according to data compiled by Bloomberg.
Tata Motors lost 1.8 per cent, extending Wednesday's 6.2 per cent slide. The company's Jaguar Land Rover unit probably earns more than half of its earnings before interest, taxes, depreciation and amortisation from China, according to a Sanford C Bernstein report dated June 23.
Vedanta plunged 4.7 per cent, taking this week's loss to 19 per cent. Tata Steel, the biggest producer of the alloy, fell 0.9 per cent to its lowest level since October 2013.
Copper prices have fallen as much as 9.5 per cent this week, in part on concerns the plunge in Chinese stocks will lead to a slowdown in economic growth and therefore demand for the metal in the country.
Larsen & Toubro climbed 2.4 per cent, while Bharat Heavy Electricals added 3.7 per cent.
Global investors bought a net $461.5 million of Indian stocks on July 6, taking this year's inflows to $6.8 billion.
The Sensex has risen 0.3 per cent this year and trades at 14 times projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 11.2.
