India's Stock Indexes Fall After Capping Best Week in Two Years

(Bloomberg) -- India's stock indexes fell, tracking global peers lower, after capping their best week in more than two years.

The benchmark S&P BSE Sensex dropped 0.2 percent to 34,950.92 at the 3:30 p.m. close in Mumbai after swinging between gains and losses at least four times. Thirteen of the 19 sector indexes retreated, led by a gauge of power-related companies, while a measure of property stocks rose the most. The NSE Nifty 50 Index lost 0.3 percent.

Drugmaker Cipla Ltd. dropped the most among Nifty members, down 7.3 percent, after its profit and revenue in July to September trailed analyst estimates. State Bank of India, the nation's top lender by assets, climbed 3.4 percent after returning to profit.

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The Sensex recovered last week amid company earnings reports and a fall in oil prices. Headwinds such as the trade tension between the U.S. and China and a domestic cash crunch continue to weigh on investor sentiment. Upcoming local state and national elections are adding to uncertainty.

“Volatility and price fluctuations are here to stay for the next three to six months, mainly as investors bet on all the possible outcomes in the run-up to the state and national polls,” said Arun Kejriwal, founder of Kejriwal Research & Investment Services Pvt. in Mumbai.

Five Indian states are headed for polls this month and the next and the outcome is seen as an indicator of the voter sentiment on the Narendra Modi-led Bharatiya Janata Party national government, which in turn is expected to seek re-election around May 2019.

The equity benchmarks are still down more than 10 percent from their all-time highest closes on Aug. 28. Yet, the stocks aren't attractive enough for some. Even as Nifty valuations decline, “it is not yet at levels which would suggest it is time to buy,” Gautam Chhaochharia, analyst at UBS Securities India Pvt., wrote in a note to investors.

The NSE Volatility Index rose 6.9 percent, halting a three-day decline. Of the 42 NSE Nifty 50 Index companies that have announced results so far, 24 have either met or exceeded profit estimates.

To contact the reporter on this story: Ameya Karve in Mumbai at akarve@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Naoto Hosoda

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