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Sensex pulls out of record after eight days of profit


India’s benchmark equities fell back after hitting new all-time highs for the past three days, snapping their longest winning streak in a month. The S&P BSE Sensex declined 0.7% to 43,309.08 at 10:26 a.m. in Mumbai, falling from Wednesday’s peak, while the NSE Nifty 50 Index fell by a similar magnitude. Both indicators this week broke a technical indicator indicating that the gains from the signals may be overstated.

Today’s pullback comes after the central bank warned that economic risks persist even as the outlook improved in October. While revenue at most of India’s largest companies rebounded in the last quarter from the worst drop in at least a decade, cost cuts bolstered operating profit and sales fell from a year earlier. Grasim Industries Ltd. and Eicher Motors Ltd. are scheduled to report their earnings later today.

“We reiterate our positive but cautious view and suggest maintaining a ‘buy on dips’ approach,” Ajit Mishra, vice president of research at Mumbai-based Religare Broking Ltd., said in a note Wednesday.

Read more | India in historic recession, shows RBI ‘nowcast’

As regulators remained cautious, Goldman Sachs turned bullish on India in hopes of a rebound in corporate profits and economic growth accelerated after lockdown restrictions were eased across the country.

Still, a report later today may show that consumer price increases exceed the upper limit of the central bank’s 6% target range, limiting its scope to reduce borrowing costs. India also continues to host the second-highest number of coronavirus infections in the world, although daily new cases are less than half the peak in mid-September, according to data compiled by Johns Hopkins University.

The rupee weakened 0.1% to 74.4162 to the US dollar, while the 10-year government bond yield rose one basis point to 5.92%.

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