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HDFC Bank, Sterlite Decline as India Stock Fall, Snapping Two-Day Advance

India’s stocks fell for the first time in three days on concern the government will step up measures to control inflation.

HDFC Bank Ltd., the third-biggest lender, declined the most in two weeks after Finance Secretary Ashok Chawla said inflation at current levels is not “socially, economically or politically acceptable.” Sterlite Industries (India) Ltd., the largest copper and zinc producer, dropped after China ordered banks to set aside more deposits as reserves, fueling concern the lending restrictions may damp demand for raw materials.

“After China’s move there is a possibility that India could also do something similar,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a publicly traded equities research provider in Mumbai. “There is no positive news to boost investor sentiment today.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 172.63, or 1 percent, to 17,386.08 at the close. The S&P CNX Nifty Index on the National Stock Exchange lost 1.1 percent to 5,222.75. The BSE 200 Index slid 0.7 percent to 2,213.89.

HDFC Bank dropped 1.5 percent to 1,969.80 rupees, its steepest fall since April 19. ICICI Bank Ltd., the second- biggest lender, retreated 1.6 percent to 936.90 rupees. The central bank raised interest rates twice in the past two months and increased the reserves for banks to slow inflation from a 17-month high.

Sterlite, Hindalco

Sterlite fell 2.4 percent to 808.7 rupees, reversing two days of gains. Copper for May delivery on the Comex in New York declined 1.5 percent, the lowest price since March 15. Markets in London and Shanghai are closed today.

Hindalco Industries Ltd., the biggest aluminum producer, dropped 3.1 percent to 172.95 rupees, its lowest close since April 8.

Stocks also fell after Australia unveiled plans to impose the world’s heaviest tax regime on mining companies and the $146 billion rescue plan for Greece failed to calm investor concerns about sovereign debt in Europe.

Sesa Goa Ltd., India’s biggest iron-ore exporter, plunged 6.2 percent to 402.2 rupees, its steepest fall since Nov. 3. India, the world’s third-largest iron-ore exporter, may face a decline in shipments of as much as 25 percent because of softening demand in China and an increase in taxes, Federation of Indian Mineral Industries President Siddharth Rungta said April 30.

Tata Steel Ltd., the biggest producer of the alloy, declined 1.9 percent to 607.05 rupees, extending the 2.2 percent retreat on April 30.

Overseas investors bought a net 7.9 billion rupees ($177 million) of Indian stocks on April 29, bringing their total purchases of the equities this year to 300.1 billion rupees, according to the nation’s market regulator.

Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years earlier in domestic currency terms, as the biggest rally in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.

The following were among the most active on the exchange:

Moser Baer India Ltd. (MBI IN) declined 1.4 percent to 73.25 rupees. The Indian maker of solar equipment said profit in the fourth quarter dropped 85 percent to 63 million rupees.

South India Bank Ltd. (SIB IN) plunged 12 percent to 153.5 rupees. The lender said fourth-quarter net income declined to 386.2 million rupees from 502.7 million rupees a year earlier.

Tata Elxsi Ltd. (TELX IN) sank 7.2 percent to 295.5 rupees. The manufacturer of computers and workstations said profit fell 47 percent to 123 million rupees in the fourth quarter.

Titan Industries Ltd. (TTAN IN) rose 2.8 percent to 2,189.75 rupees. India’s largest jewelry retailer climbed to its highest in at least 19 years after quarterly profit surged 84 percent.

Tube Investments of India Ltd. (TI IN) gained 0.3 percent to 96.8 rupees. The maker of steel products climbed to a four- year high in Mumbai trading after saying fourth-quarter profit more than doubled to 367.9 million rupees.

Uco Bank (UCO IN) jumped 4.6 percent to 72.35 rupees. The lender posted a profit of 3.8 billion rupees compared with 1.03 billion rupees in the fourth quarter.

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

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