Nov. 10 (Bloomberg) -- India’s stocks fell, reversing earlier gains, after Finance Minister Pranab Mukherjee raised concern about domestic demand when he said fiscal stimulus measures will be withdrawn.

Maruti Suzuki India Ltd., the maker of half the cars sold in India, slid 2.4 percent after Mukherjee said the government will take “corrective” steps and pull back fiscal stimuli once economic recovery takes hold, stressing the need to cut the budget deficit. Hindalco Industries Ltd., the biggest aluminum producer, fell 1.5 percent on a slide in the price of the metal on the London Metal Exchange.

“The finance minister’s comment shows that domestic demand is not as robust as it was earlier thought,” said R.K. Gupta, who helps oversee the equivalent of $387 million at Taurus Asset Management Ltd. in New Delhi. “The biggest concern is the rising prices of essential commodities, which is suppressing domestic demand.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, dropped 58.28, or 0.4 percent, to 16,440.44 at 3:20 p.m. in Mumbai, after rising as much as 1.1 percent. The gauge had risen 7.1 percent in the previous four trading sessions.

The S&P CNX Nifty Index on the National Stock Exchange declined 0.2 percent to 4,886.70. The BSE 200 Index was little changed at 2,055.48.

Maruti fell 2.4 percent to 1,449.5 rupees.

“Fiscal consolidation is imperative,” Mukherjee told the India Economic Summit organized by the World Economic Forum in New Delhi today. He said fiscal stimulus will be withdrawn in “due course,” two days after Prime Minister Manmohan Singh said it will be done next year.

Hindalco fell 1.7 percent to 127.2 rupees. Aluminum fell 0.4 percent to $1,945 a ton on the London Metal Exchange. Sterlite Industries (India) Ltd., the No. 1 copper and zinc producer, slid 1.2 percent to 791 rupees. Copper for delivery in three months on the LME lost as much as 0.3 percent to $6,520.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net.

Last Updated: November 10, 2009 04:58 EST