Markets drop for 6th session, longest losing streak in 5 months

Stocks dropped for a sixth day, its longest losing streak in about five months, as quarterly earnings at some of the largest companies missed forecasts and reports showed contraction in China's manufacturing sector.

Sun Pharmaceutical Industries, the most valuable drugmaker, fell to a four-week low after saying growth in revenue and profit will be adversely impacted in the year ending in March. Larsen & Toubro, the top engineering company, decreased for a 10th day after paring its outlook on revenue growth last week. Bajaj Auto was the worst performer on the S&P BSE Sensex after sales slid in October.

The Sensex slid 0.4 per cent to 26,559.15 at the close, completing the longest stretch of losses since June. While 72 per cent of its members that posted results for the September quarter have matched or beaten estimates, versus 60 per cent in June, the gauge's profits have risen just two per cent over the previous quarter, data compiled by Bloomberg show. The index's valuation climbed to 15.9 times projected 12-month earnings last week, the most expensive since August.

"Earnings are looking tired across most sectors, while valuations in some high-growth sectors like pharma and consumers are looking stretched," Parag Thakkar, the head of institutional sales at HDFC Securities in Mumbai, said in an interview to Bloomberg TV India. "Plus, there are concerns of a global slowdown in spite of the liquidity infusion. The stage isn't set yet for good times."

Bihar election

Investors are also awaiting the results of the state election, due on November 8, in Bihar. The polls are important for Prime Minister Narendra Modi's efforts to control the upper house of parliament, where opposition parties have blocked key economic proposals including a nationwide sales tax. A win would give him momentum in about a dozen more state elections through 2017 that will determine control of the body.