Sensex drops from 8-month high

STOCKS declined, led by two-wheeler makers and utilities, as some investors judged the benchmark index’s advance to an eightmonth high was overdone.

GAIL India and Power Grid Corp were the biggest decliners on the S&P BSE Sensex. NTPC, the biggest power producer, fell the most in two weeks. Bharti Airtel, the largest mobile-phone operator, slid for the first time in four days. Hero MotoCorp and Bajaj Auto, the largest motorcycle makers, dropped 1.6% each.

The Sensex slid 0.4% at the close in Mumbai, ending a sixday, 3.3% climb. The rally sent the gauge’s seven-day relative strength index to 71 Monday, a level some investors see as a signal to sell, and left 80% of the country’s top 100 companies trading above their 200-day moving average, the most since December 2014, according to data compiled by Bloomberg. Asian stocks dropped for the first time in a week as haven assets including the yen and sovereign bonds climbed.

“The decline is just consolidation and profit-booking by some investors,” Paras Bothra, a Mumbai-based vice president of equity research at Ashika Stock Broking, said by phone. “The market has shown great resilience after the Brexit vote. The mood is very positive. We’re advising clients to buy at every dip."

Fading prospects of a US interest-rateincreaseandspeculation that central banks will add to monetary stimulus in Europe and Japan helped global stocks recover the bulk of the declines that followed the UK’s June 23 vote. In India, the Sensex capped its best quarter since Prime Minister Narendra Modi’s election victory in May 2014, as his party eased rules on foreign directinvestment,approvedanew mining policy and said it would seek to pass the goods-and-services tax in the parliament session starting July 18.

The rally was aided by purchases of $771 million by global funds in June, a fourth month of net inflow, data compiled by Bloomberg show.

GAIL India plunged 2.6 percent, the steepest drop since May 19. Power Grid tumbled the most since Feb. 29 and NTPC declined the most since June 23.

Bharti Airtel lost 2%. Hero MotoCorp fell for a second day and Bajaj Auto declined for a third day.

The Sensex has advanced 4 percent this year and trades at 16.3 times projected 12-months profits, versus a five-year mean of 14.3 and a multiple of 11.9 for the MSCI Emerging Markets Index, data compiled by Bloomberg show. Bloomberg

Mumbai, July 5: Jaypee Group stocks ended with sharp gains of up to 28% after the debt-ridden group raised the sale value of 21.2 mtpa cement assets to Aditya Birla Group firm UltraTech to `16,189 crore. Shares of Jaiprakash Associates zoomed 27.97% to settle at `11.62 on BSE. During the day, it jumped 37.66% to `12.50. Jaypee Infratech skyrocketed 15.85 per cent to end at `10.60 and Jaiprakash Power Ventures rallied 10.37% to `5.64. Shares of UltraTech Cement however, closed lower by 1.16% at `3,371.20. The decision was taken on Monday at the board of directors meeting of the Jaypee Group flagship firm Jaiprakash Associates, convened at short notice, to discuss the progress of divestment plans and other issues. UltraTech Cement has also agreed to pay an additional amount of `470 crore for completion of 4 million tonne per annum (MTPA) grinding unit in Uttar Pradesh. PTI