Sensex Retreats From Record After Eight Days of Gains

India’s benchmark equity gauges retreated after reaching new record 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 as of 10:26 a.m. in Mumbai, slipping from Wednesday’s peak, while the NSE Nifty 50 Index fell by a similar magnitude. Both gauges this week breached a technical indicator that signals gains may be overdone.

Today’s pullback comes after the central bank warned economic risks remain even as prospects brightened in October. While income at most of India’s largest companies rebounded last quarter from the worst decline in at least a decade, cost-cuts shored up operating profits and sales dipped from a year earlier. Grasim Industries Ltd. and Eicher Motors Ltd. are scheduled to report earnings later today.

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

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

As regulators remained cautious, Goldman Sachs turned bullish on India on hopes of a rebound in corporate earnings and economic growth picking up pace after the lockdown curbs were eased across the country.

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

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

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