India’s benchmark stock index dropped the most in five months as growth in the nation’s industrial production unexpectedly slowed to a 16-month low.
Mahindra & Mahindra Ltd., the largest maker of sport- utility vehicles and tractors, declined the most since May. Output at factories, utilities and mines rose 4.4 percent in September after a revised 6.9 percent increase a month earlier, the statistics office said today. The median estimate of 27 economists in a Bloomberg News survey was for a 6.4 percent gain. Hindalco Industries Ltd., the biggest aluminum producer, slid as metal prices slumped on speculation China, the biggest consumer, may attempt to rein in inflation by raising interest rates.
“The numbers have clearly disappointed,” said Aneesh Srivastava, the Mumbai-based chief investment officer at IDBI Federal Life Insurance Co., who manages about $325 million. “We will be a little conservative and cautious in our investing. We will not increase our exposure to the capital goods sector.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost 432.20, or 2.1 percent, to 20,156.89, as of the 3:30 p.m. close in Mumbai, completing its steepest one-day slide since June 1. The gauge declined 4 percent this week, the most since the five-days ended May 7. The S&P CNX Nifty Index on the National Stock Exchange dropped 2 percent to 6,071.65. The BSE 200 Index retreated 2.1 percent to 2,562.61.
Mahindra, Hindalco
Stocks on the Sensex are valued at 19.2 times earnings after jumping 15 percent this year. The gauge is the best performer and the most expensive among the ten biggest markets in the world.
Mahindra & Mahindra plunged 5 percent to 773.15 rupees, its biggest drop since May 19. Tata Motors Ltd., the biggest truckmaker and owner of Jaguar Land Rover, fell 2.3 percent to 1,246.25 rupees, its lowest close since Nov. 5.
Hindalco sank 4.6 percent to 223.1 rupees, its steepest drop since June 8. Sterlite Industries (India) Ltd., the No. 1 copper and zinc producer, slumped 2.3 percent to 181.95 rupees. Tata Steel Ltd., the biggest producer of the alloy, slid 3.8 percent to 606.95 rupees.
Commodities tumbled today, with copper falling from a record and oil slipping from a two-year high, on speculation China may attempt to rein in inflation by raising interest rates, curbing demand in the world’s biggest consumer of metals and energy.
DLF, Bharti
The MSCI Asia Pacific Index dropped the most in more than two months and completing its biggest weekly loss in three months.
DLF Ltd., the biggest developer, plunged 5.6 percent to 327.2 rupees, its biggest drop since June 7. The shares were cut to “underperform” from “neutral” by Anand Agarwal and Abhishek Bansal, analysts at Credit Suisse Group AG, who said “disappointment” on volumes and cash flow will continue after “weak” second-quarter results.
Bharti Airtel Ltd., the largest mobile-phone operator, retreated for a third day after profit dropped, slumping 3.5 percent to 305.55 rupees, its lowest close since July 22. Reliance Communications Ltd., the second-largest mobile-phone operator, fell 3.5 percent to 169.9 rupees.
‘Weak Sentiment’
State Bank of India sank 4.7 percent to 3,026.8 rupees, its sharpest drop since Jan. 27. The nation’s largest lender’s rating was lowered by the Reserve Bank of India after the regulator inspected accounts for the year through March 2009, the Mint reported, without saying where it got the information. S. S. Ranjan, chief financial officer of State Bank, didn’t immediately respond to calls to his cell phone.
“Investor sentiment is weak,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a publicly traded equities research provider in Mumbai. “Some of the results have disappointed. Cues from other Asian markets have not helped either.”
Overseas investors bought a net 1.08 billion rupees of Indian stocks on Nov. 10, taking this year’s record flows to 1.3 trillion rupees, according to data on the website of the Securities and Exchange Board of India.
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