Global Rally Skips India Stocks as Sun Pharmaceuticals Plunges

(Bloomberg) -- Indian equities missed a global stocks rally as plunge in shares of the nation’s biggest drugmaker dragged the key indexes lower.

The benchmark S&P BSE Sensex dropped 0.2 percent to 36,320.74 as of 11:07 a.m. in Mumbai, reversing a gain of as much as 0.3 percent in early trade. The NSE Nifty 50 Index also fell 0.2 percent.

Investors will continue to take cues from global events ahead of the national elections due by May. Earnings reports for the December quarter will also be in focus, with six of the top 50 companies having reported so far.

The Numbers

• Sun Pharmaceutical Industries Ltd. plunged about 13 percent, the worst performer in Asia, after a report of a second complaint against governance standards at the company.
  • Reliance Industries Ltd. climbed 1.3 percent, the most among Sensex members, after reporting a third-quarter net income that topped analyst estimates.
• Software firm Cyient Ltd. and Tata group company Rallis India Ltd. retreated at least 4.6 percent as their December quarter profits trailed estimates.
• Fifteen of the 19 sector indexes compiled by BSE Ltd. advanced, led by a gauge of telecom stocks.
• Net incomes of four of the six Nifty 50 companies that have reported earnings so far have matched or beaten estimates, data compiled by Bloomberg shows.

Strategist Views

• “Sun Pharma has been facing issues on corporate governance since last few months and there are reports of a new whistle-blower complaint,” said Sameer Kalra, president at Target Investing in Mumbai.
• “Poorly thought out regulations and a delay in bankruptcy resolutions are the two biggest negatives for Indian equities,” said Chakri Lokapriya, chief investment officer at TCG Asset Management.
  • Lokapriya expects “muted earnings” in 2020 earnings, with “pockets of growth” such as banking and software exporters.

Analyst Notes/Market-Related Stories

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