Sensex completes 2nd weekly retreat

Indian stocks fell for the second day, with the benchmark index retreating to a five-week low, as property developers and power utilities declined.

NTPC, the country's biggest generator, tumbled the most in a year. Housing Development & Infrastructure was the worst performer on a gauge of real estate companies. Tata Motors, owner of Jaguar Land Rover, slid for a third day, while Hindustan Unilever, the biggest home products maker, decreased to a three-week low.

The benchmark BSE Sensex dropped 0.7 per cent to 28,261.08 at the close, the lowest level since February 9. The gauge has fallen 5.9 per cent from its March 4 peak as earnings per share for the 30 Sensex companies declined in the December quarter for the first time since the three months ended June 2013, according to data compiled by Bloomberg. The measure is valued at 15.9 times its projected 12-month profits, higher than its three-year average of 14.1, the data show.

"The expansion in price-earnings ratio hasn't been backed by growth in earnings," Ajay Srivastava, managing director of Dimensions Consulting., said in an interview to Bloomberg TV India today. "It's clear that the earnings season for March will be a wash out, and that the economic recovery everyone was anticipating has been pushed back to 2016 or 2017. That's why every rally is being sold into."

Indian stocks fell in the final hour of trading on Thursday after jumping as much as 1.3 per cent in the wake of the US Federal Reserve's move to cool the outlook for interest-rate increases. Data last week showed retail inflation accelerated more than estimated and factory output rose, while wholesale prices slowed more than forecast, complicating central bank Governor Raghuram Rajan's next move after two unscheduled interest-rate cuts this year.