Indian stocks swung between gains and
losses as some investors judged a recent rally excessive.
Tata Motors Ltd. (TTMT), the nation’s biggest truckmaker and owner of Jaguar Land Rover, dropped 1.2 percent after June sales declined. Bharti Airtel Ltd. (BHARTI), the largest mobile-phone operator, climbed 1.1 percent.
The BSE India Sensitive Index (SENSEX), or Sensex, retreated 0.2 percent to 17,403.83 at 9:54 a.m. after swinging between gains and losses at least five times. Its 14-day relative strength index, a measure of how rapidly prices rose or fell during the specified period, was 68 on June 29. Some investors see readings of more than 70 as a signal to sell.
“Investors are taking a breather given the superb rally we had last month,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. “They are waiting for some trigger which could come from more reform measures by the Prime Minister to boost economic growth.”
Indian stocks jumped the most in Asia in June on optimism Prime Minister Manmohan Singh will accelerate the government’s reform agenda after he took over the country’s Finance Ministry on June 26. Singh, who will head the ministry until a successor for Pranab Mukherjee is named, was finance minister in the 1990s, sparking an economic turnaround that now faces one of its sternest tests.
“There is hope that he will go quicker on reforms because there is so much pressure from the media, analysts and economists that we are not doing anything,” Nirmal Jain, chairman of IIFL Ltd., a Mumbai-based brokerage, said in a Bloomberg UTV interview on June 29.
The Sensex has gained 13 percent this year and trades at 13.6 times estimated earnings. Valuations sank to a three-year low of 12.4 times on May 23 on concern slowing economic growth will hurt corporate profits. The MSCI Emerging Markets Index trades at 10 times.
Overseas investors sold a net $122.1 million of Indian stocks on June 28, paring their investment this year to $8.6 billion, according to the nation’s market regulator.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
Tata Motors Ltd. (TTMT), the nation’s biggest truckmaker and owner of Jaguar Land Rover, dropped 1.2 percent after June sales declined. Bharti Airtel Ltd. (BHARTI), the largest mobile-phone operator, climbed 1.1 percent.
The BSE India Sensitive Index (SENSEX), or Sensex, retreated 0.2 percent to 17,403.83 at 9:54 a.m. after swinging between gains and losses at least five times. Its 14-day relative strength index, a measure of how rapidly prices rose or fell during the specified period, was 68 on June 29. Some investors see readings of more than 70 as a signal to sell.
“Investors are taking a breather given the superb rally we had last month,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. “They are waiting for some trigger which could come from more reform measures by the Prime Minister to boost economic growth.”
Indian stocks jumped the most in Asia in June on optimism Prime Minister Manmohan Singh will accelerate the government’s reform agenda after he took over the country’s Finance Ministry on June 26. Singh, who will head the ministry until a successor for Pranab Mukherjee is named, was finance minister in the 1990s, sparking an economic turnaround that now faces one of its sternest tests.
Reform Pressure
Singh’s administration has seen its agenda stymied by opposition from its own coalition allies, and last year suspended a plan to allow Wal-Mart Stores Inc. (WMT) and other foreign companies to buy majority stakes in Indian multi-brand retailers. An anti-corruption bill and proposals to allow foreign direct investment in pensions have also been shelved.“There is hope that he will go quicker on reforms because there is so much pressure from the media, analysts and economists that we are not doing anything,” Nirmal Jain, chairman of IIFL Ltd., a Mumbai-based brokerage, said in a Bloomberg UTV interview on June 29.
The Sensex has gained 13 percent this year and trades at 13.6 times estimated earnings. Valuations sank to a three-year low of 12.4 times on May 23 on concern slowing economic growth will hurt corporate profits. The MSCI Emerging Markets Index trades at 10 times.
Overseas investors sold a net $122.1 million of Indian stocks on June 28, paring their investment this year to $8.6 billion, according to the nation’s market regulator.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
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