(Bloomberg) -- Indian stocks fell for a seventh day, set for the longest streak in 15 months, after local elections indicated a setback for Prime Minister Narendra Modi’s party and U.S. jobs data strengthened the case for higher interest rates. The rupee and bonds retreated.
The S&P BSE Sensex slid 1.3 percent to 28,339.33 at 2:21 p.m. in Mumbai, headed for the lowest level since Jan. 19. The rupee slid 0.8 percent to 62.18 per dollar, the weakest level in three weeks, while the yield on government bonds due in July 2024 climbed two basis points to 7.72 percent.
Six of the seven exit polls after voting ended in Delhi predict a loss for the Bharatiya Janata Party, a result that may boost the strength of opposition parties seeking to block many of Modi’s economic policies. Federal Reserve stimulus has helped spur $7.3 billion of inflows
into Indian equities and bonds this year, after a record $42 billion of net purchases in 2014.
“Indian stocks will be weak after the Delhi poll outlook and may extend decline in coming days if the global cues are negative,” Andrew Holland, chief executive officer at Ambit Investment Advisors Pvt. in Mumbai, said by e-mail today. “The exit polls forecast is a wake-up call for the Modi government, a signal that it can’t be complacent.”

Unbeatable

Modi has been nearly unbeatable since winning the biggest Indian election mandate in 30 years. His BJP has come first in three of four state elections, which are crucial to overcoming opposition in parliament’s upper house and passing bills to allow more investment and ease land clearances. A defeat will increase pressure on Modi to deliver on his pledge to create jobs, upgrade infrastructure and make it easier for foreigners to do invest in India.
“2014 was about hope and belief and this year has to be about delivery of promises made by the ruling party before it won the general elections last year,” said Holland.
Three-month offshore non-deliverable forwards, which are settled in U.S. dollars, dropped 0.2 percent to 62.99. Forwards are agreements to buy or sell assets at a set price and date.
“Given how the equity market is behaving, we might see the currency staying under pressure for some more time,” said Paresh Nayar, head of currency and money markets at FirstRand Ltd. in Mumbai.
Gail India Ltd., the largest natural-gas supplier, plunged 4.3 percent, the most since Dec. 12. The company reported its third-quarter profit slumped 64 percent to 6.04 billion rupees, trailing the 8.57 billion rupees estimated by analysts.

Earnings Scorecard

Tata Steel Ltd. slid 2.2 percent after its third-quarter sales of 333.2 billion rupees fell short of analyst estimates.
Sixty-five percent of the 19 Sensex companies that have reported earnings for the December quarter so far beaten or matched estimates. Profits at 67 percent of the 30 Sensex companies beat or matched analyst estimates in the September quarter, versus 46 percent in the three months ended June and 60 percent in March, data compiled by Bloomberg show.
Larsen & Toubro Ltd., India’s largest engineering company, will probably report group profit rose to 12.6 billion rupees from 12.4 billion rupees a year earlier, according to a Bloomberg survey. The shares declined 1.6 percent.
DLF Ltd., the country’s biggest developer, will probably say its third-quarter profit fell to 1.25 billion rupees from 1.45 billion rupees in the same period a year ago, according to a separate survey. The shares plunged 4.2 percent.

Jaguar Recall

Tata Motors Ltd. fell 1.7 percent after its unit Jaguar Land Rover North America will recall as many as 104,000 cars after the U.S. National Highway Traffic Safety Administration published three notices that highlighted issues that could lead to faulty braking and lighting.
The Sensex has gained 3.3 percent this year and trades at 15.8 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 11.7. The Sensex fell for a seventh day, the longest run of losses since November 2013. The gauge capped a second weekly loss after three of India’s five-biggest lenders posted an increase in bad-loan provisions in their earnings filings.
India will release gross domestic product data for the quarter ended Dec. 31 today.
(A previous version of the story corrected the extend of drop in China imports.)