Sensex declines most in three weeks, loses 3.8%

The 30-share BSE index ended at 9,066.70, 357.54 points down and 50-share NSE Nifty lost 108.20 points to close at 2766.65
Mumbai: The Bombay Stock Exchange’s (BSE) benchmark index fell the most in three weeks on Monday. Auto makers and developers declined after Tata Motors Ltd posted a loss and Mahindra and Mahindra Ltd (M&M) and DLF Ltd reported earnings that lagged behind analysts’ estimates.

Tata Motors fell 3.9%, while M&M declined 3.5%. DLF dropped 14% to its lowest since it went public in 2007.

“Analysts have overestimated company earnings,” said Jayesh Shroff, who helps manage $2 billion (Rs 9,800 crore) in equities at SBI Asset Management Co. Ltd in Mumbai. “They haven’t estimated the extent of erosion in profits correctly.”

The Sensex fell 357.54 points, or 3.8%, to 9,066.70, the most since 7 January. The S&P CNX Nifty index on the National Stock Exchange (NSE) slid 108.15 points, or 3.8%, to 2,766.65.

DLF fell 14% to Rs153. The company reported a 69% drop in third quarter (Q3) net income to Rs671 crore on 31 January. That was lower than the Rs1,590 crore median estimate of analysts surveyed by Bloomberg. DLF had its rating cut to “reduce” by Kotak Institutional Equities Research after the earnings.

Unitech Ltd traded 8.9% lower at Rs29.30. Profit declined 74% to Rs136 crore, missing the Rs300 crore median estimate in a Bloomberg survey.

Tata Motors dropped 3.9% to Rs143.75 after reporting its first quarterly loss in seven years. The company had a net loss of Rs263 crore in the quarter ended 31 December. The median estimate in a Bloomberg survey was for net income of Rs14.20 crore. The loss doesn’t include financials of Jaguar and Land Rover.

M&M fell 3.5% to Rs291.75 after Q3 profit tumbled by 99%, more than expected, as currency losses mounted and sales fell. Net income in the three months ended 31 December dropped to Rs1.20 crore, lagging behind the Rs109 crore profit estimate of analysts surveyed.

Kingfisher Airlines Ltd dropped Rs2.35, or 6.7%, to Rs32.70 after the company said its Q3 loss widened to Rs413 crore, from Rs191 crore a year earlier.

SpiceJet Ltd declined Re0.74, or 5.3%, to Rs13.26 after the company reported a Rs17.96 crore net loss in the three months ended December, compared with a Rs9.34 crore profit a year earlier.

State Bank of India fell Rs55.20, or 4.8%, to Rs1,095.80 after the lender said it will keep interest rates on new home loans unchanged at 8% for a period of one year.