Sensex snaps five-session winning streak; HUL slumps

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex and Nifty fell on Monday, retreating from a more than one-month high hit earlier in the session as investors booked profits after recent strong gains, while consumer goods maker Hindustan Unilever slumped after it warned the country's consumer spending will remain weak in the near term.

The declines came after the indexes had gained for five consecutive sessions in the week through Wednesday. Share markets were closed Thursday and Friday to mark a religious holiday.

Shares of companies facing regulatory probes also continued to slump, with DLF ending down 7.9 percent. DLF shares have fallen 23.32 percent after markets regulator SEBI barred it from accessing the capital markets for three years on Oct. 13.

 

Recent gains might have outpaced the outlook for corporate profits, investors said. Key July-September earnings of top companies, including Hindustan Unilever, Tata Consultancy Services and Bajaj Auto , have so far failed to beat expectations.

"July-September earnings have been mixed. Nothing phenomenal compared to rising expectaions. Some profit-booking would continue till the end of the results season," said U.R. Bhat, managing director at Dalton Capital, a unit of U.K.-based investment management firm Dalton Strategic Partnership LLP that manages nearly $2 billion in assets.

Near-term direction would also hinge on the U.S. Federal Reserve meeting's outcome due Wednesday, the Reserve Bank of India's policy and the winter session of parliament scheduled in the coming months, Bhat added.

The benchmark BSE Sensex fell 0.37 percent, or 98.15 points, to end at 26,752.90.

The broader Nifty lost 0.29 percent, or 22.85 points, to end at 7,991.70, closing below the psychologically important 8,000-level.

Both the indexes pared gains after earlier marking their highest intraday levels since Sept. 23.

Hindustan Unilever ended down 5.1 percent, marking its biggest single-day fall since Jan 2011, after its July-September volume growth at 5 percent failed to beat some analysts' estimates, stoking worries of a slowdown in consumer spending despite the ongoing festival season.

Among other companies facing regulatory probes, Jindal Steel and Power lost 8 percent on an ongoing federal police investigation into coal block allocations.

An unprecedented ban on India's largest listed property developer DLF Ltd from tapping capital markets has fuelled expectations of tougher penalties ahead, as the country's regulators feel emboldened to take on even companies long sheltered by political connections.

Cairn India fell 4.1 percent after Brent crude prices dropped below $86 after Goldman Sachs cut its oil price forecasts for the first quarter of 2015. Lower crude oil prices can hit revenues of oil explorers.

Oil and Natural Gas Corp fell 2.2 percent on worries the government may sell stake in the oil explorer at a discount to market prices.

India's defence equipment makers, however, rallied after local media reported defence projects worth 800 billion rupees ($13.07 billion) were cleared on Saturday by the government.

Bharat Heavy Electricals rose 5.1 percent while Larsen and Toubro gained 0.6 percent.

(Editing by Biju Dwarakanath)