Stocks retreat as Unilever profit trails estimates

India's benchmark stock index dropped from an 11-month high after the nation's largest telecom companies cut rates and quarterly profits from the biggest consumer company disappointed investors.

Mobile-phone operators Bharti Airtel and Idea Cellular were among the worst performers on the MSCI Asia Pacific Excluding Japan index after lowering data prices before billionaire Mukesh Ambani's Reliance Jio Infocomm launches its services. Reliance Industries, which operates the world's biggest refinery complex, erased gains of as much as 2.7 per cent. Hindustan Unilever tumbled the most in five weeks after reporting profit and revenue that lagged behind estimates.

The S&P BSE Sensex dropped 0.3 per cent at the close, erasing an intraday advance of 0.6 per cent. Investor attention has turned to the June-quarter results season for signs that stock valuations near a five-year high are supported by company profits. An indication from former finance minister P Chidambaram that the ruling Bharatiya Janata Party and the main opposition have not yet reached a compromise that will enable the passage of the unified sales tax bill in the monsoon session of Parliament also weighed on sentiment.

"India is not a cheap market so any disappointment in corporate profits' recovery or a delay in the government implementing key reforms could add to volatility," Kristy Fong, a Singapore-based assistant investment manager at Aberdeen Asset Management Plc, said by e-mail.

Bloomberg