MUMBAI – India’s stocks fell for the first time in four days after Reliance Industries Ltd., the nation’s most valuable company, reported fourth-quarter earnings that lagged behind forecasts.
Reliance, the owner of the largest oil-refining complex, fell the most in five weeks after its profit missed analysts’ earnings estimates for the fifth time in six quarters. Reliance joins Infosys Technologies Ltd., the second-largest software maker, in reporting profit that trailed estimates. The two companies have a 13 per cent weighting on the benchmark index.
“Reliance result has not left any room for optimism,” said K N Rahaman, deputy head of research at Way2Wealth Brokers Pvt. in Mumbai. “The market will be under pressure as the results of heavyweights have disappointed. There’s no fresh impetus for a rally.”
The Bombay Stock Exchange Sensitive Index, or Sensex, fell 17.92, or 0.1 per cent, to 19,584.31, at the 3:30 p.m. close in Mumbai. The gauge swung between gains and losses at least 20 times. The S&P CNX Nifty Index on the National Stock Exchange declined 0.2 per cent to 5,874.50 and its April futures settled at 5,877. The BSE 200 Index was little changed at 2,415.04.
Reliance plunged 3 per cent to Rs.1,009.35, its steepest decline since March 18. Its April futures settled at Rs.1,012. Net income in the quarter ended March 31 rose 14 per cent to Rs.53.8 billion ($1.2 billion) from Rs.47.1 billion a year ago, the company reported on April 21.
The average estimate of 18 analysts in a Bloomberg survey was Rs.54.3 billion. Markets were closed on April 22 for a public holiday.
State Bank of India, the largest lender, climbed to a four- month high after the central bank eased rules for provisions to cover loan defaults. State Bank rose 2 per cent to Rs.2918.8, its highest close since December 6. The RBI said that lenders need to maintain a provision coverage ratio of 70 per cent, according to their gross non-performing assets as of September 30. It also said that most banks have achieved the coverage ratio.
Indian shares gave up early gains to close lower for the third consecutive session Wednesday, weighed by losses in heavyweight Reliance Industries due to persistent concerns over falling gas output from the company's fields off India's east coast.
The Bombay Stock Exchange's Sensitive Index fell 96.66 points, or 0.5%, to close at 19,448.69, after moving between 19,412.79 and 19,633.63. On the National Stock Exchange, the 50-stock S&P CNX Nifty slipped 34.50 points, or 0.6%, to end at 5,833.90.
Trading volume on the BSE rose to INR32.39 billion from Tuesday's INR31.06 billion. Gainers lagged decliners 1,319 to 1,554, while 114 stocks were unchanged.
"Reliance's falls weighed on the market but quarterly earnings have been encouraging on the whole," said Deven Choksey, managing director at K.R. Choksey Shares & Securities.
He expects the Sensex to gain once investors have more cash available after the expiry of April derivatives Thursday.
Banking stocks are likely to be in focus Thursday, with India's second-largest lender by assets, ICICI Bank, and state-run Bank of Baroda due to report quarterly earnings, say analysts.Of the 30 Sensex constituents, 23 ended lower Wednesday.– Agencies