India stocks drop as Sensex extends retreat from record high
The S&P BSE Sensex traded little changed at 49,506.59 as of 11:49 a.m. in Mumbai after dipping as much as 0.6%. The measure has been setting record highs in the last few weeks. The NSE Nifty 50 Index also traded flat.
“The speed of the rise has been too fast and with minimal corrections on the way,” said Deepak Jasani, head of retail research at HDFC Securities Ltd. in Mumbai, “Also, hopes of the economy and corporate earnings turning around have supported the rise, but India and its corporates have been known to disappoint on both counts.”
Overly optimistic earnings estimates and a reduction in liquidity pose the biggest threats to the scorching pace of gains, strategists from Nomura Holdings Inc. to Kotak Mahindra Asset Management Co. warned. The S&P BSE Sensex Index has risen for 10 straight weeks -- its longest winning streak since 2009.
Wipro Ltd. and Infosys Ltd were the biggest drags on the broader Nifty index, with each falling as much as 5%, as investor took profit after Infosys posted better-than-expected quarterly earnings.
The yield on the benchmark 10-year government bond decreased by one basis point to 5.9%, while the rupee was little changed at 73.1225 against the U.S. dollar.