Market set to end longest winning streak since 2018

By Ishika Mookerjee

India’s stock benchmark fell, set to snap nine days of gains, as risk appetite ebbed globally and the domestic earnings season got off to a rocky start.

The S&P BSE Sensex slid 0.5% to 40,408.40 as of 12:42 p.m. in Mumbai, while the NSE Nifty 50 Index declined 0.6%. Asian stocks also traded lower as the North American earnings season began and with no sign of a quick end to the stalemate over U.S. fiscal stimulus. Both Indian measures completed their longest winning streak since April 2018 on Tuesday.

“There will be some profit-booking given the big run-up,” said Umesh Mehta, head of research at Samco Securities Ltd., adding that Wipro Ltd.’s results will “further spoil the mood as the earnings season has gotten off to a negative start.”

After market hours on Tuesday, Wipro reported net income of Rs 2,470 crore ($337 million) for the three months through September versus a consensus estimate of Rs 2,520 crore. The stock plunged as much as 6.9% and has seen rating downgrades by at least three brokers since. Both Nifty 50 firms that have announced earnings so far have missed analyst estimates. Infosys Ltd. is due to release results later today.

Some technical indicators are also signalling that Indian stocks may be set for a pullback. The Sensex index is flirting with its upper Bollinger band -- two standard deviations above its 20-day moving average -- while the gauge’s 14-day relative strength index is close to overbought territory.

Still, the two Indian measures are close to erasing year-to-date losses, supported by inflows of around $821 million into Indian equities from foreign investors this month.

The yield on the 10-year government bond was little changed at 5.90%, while the rupee weakened 0.1% to 73.4498 per dollar.

The Numbers

* Fourteen of the 19 sector indexes compiled by BSE Ltd. declined, led by a gauge of utilities.

* Infosys Ltd was among the biggest drags on the Sensex and dropped 1.3%, while Hindustan Unilever Ltd. added 1.1% and gave the biggest boost.