Tata Steel, State Bank Lead First Decline in India's Stocks in Three Days

Indian stocks fell for the first time in three days, led by Tata Steel Ltd. on concern Europe’s debt- cutting measures will hurt global growth. State Bank of India dropped after profit missed analysts’ estimates.

Tata Steel, the nation’s biggest producer of the alloy, declined 4.9 percent. Metal prices tumbled on concern that demand may weaken. State Bank of India, the No. 1 lender, slid 4.4 percent.

“People are still worried about European debt and are pulling out money, especially from commodities,” said Deven Choksey, chief executive officer at K.R. Choksey Shares & Securities in Mumbai who manages about $123 million for wealthy individuals. “Investors are somewhat cautious.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 271.27, or 1.6 percent, to 16,9994.60, its lowest level since May 7. The gauge advanced 1.3 percent this week, its first weekly gain in three. The S&P CNX Nifty Index on the National Stock Exchange lost 1.7 percent to 5,093.50. The BSE 200 Index dropped 1.4 percent to 2,160.45.

Tata Steel lost 4.7 percent to 547.95 rupees. Sterlite Industries (India) Ltd., India’s largest copper producer, retreated 3.8 percent to 701.3 rupees. Hindalco Industries Ltd., the No. 1 aluminum producer, fell 3.5 percent to 163.40 rupees.

Profit Declines

Copper for three-month delivery declined 2 percent per metric ton in London today. All of the six main metals traded on the London Metals Exchange fell.

State Bank lost 4 percent to 2,224.25 rupees. Quarterly net income fell 32 percent, the first decline in more than three years, as the lender set aside more provisions for bad loans. Analysts had estimated profit of 27.3 billion rupees, based on the average of 21 predictions compiled by Bloomberg.

Emerging-market equity funds had a second straight week of redemptions as Europe’s sovereign-debt crisis dented demand for riskier assets, EPFR Global said in an e-mail.

“Fears that Greece’s fiscal problem could raise borrowing costs around the world and plunge Europe back into recession prompted a crash re-rating of the outlook for emerging markets in early May,” the research company said.

Selling Stocks

Overseas investors sold a net 1.66 billion rupees of Indian equities on May 12, paring their total purchases of the stocks this year to 276.5 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:

Aban Offshore Ltd. (ABAN IN), India’s largest oil rig company, sank the most in almost 18 years, sliding 18 percent to 832.25 rupees. Investigations started in Venezuela into the sinking of a natural-gas platform leased by a unit to state- owned Petroleos de Venezuela SA.

Alok Industries Ltd. (ALOK IN), a supplier of textiles to Wal-Mart Stores Inc. and Gap Inc., gained 1 percent to 20.10 rupees. The company had about 9.38 million shares, or 1.2 percent of its equity, change hands in five trades on the Bombay Stock Exchange. Buyers and sellers weren’t immediately known.

Mahanagar Telephone Nigam Ltd. (MTNL IN), the state-owned operator, fell 2.1 percent to 64.40 rupees, its lowest in 14 months. The company had a net loss of 15.7 billion rupees in the fourth quarter from profit of 730 million rupees a year earlier.

McNally Bharat Engineering Co. (MCNA IN), an engineering- services provider, slid 3.3 percent to 311.65 rupees. The company’s quarterly profit fell 12 percent from a year earlier.

SpiceJet Ltd. (SJET IN), a low-cost carrier, rose 3 percent to 56.50 rupees. The airline got approval to fly overseas from next month, the Mint newspaper reported, citing people in the aviation ministry it didn’t identify. SpiceJet’s Chief Executive Officer Sanjay Aggarwal wasn’t immediately available to comment on the report when called at his office.

Windsor Machines Ltd. (WML IN), a maker of plastic molding machines, surged 10 percent to 47.75 rupees. About 2.3 percent of its equity changed hands in 10 transactions in Mumbai, according to Bloomberg data. Buyers and sellers weren’t immediately known.

To contact the reporter on this story: Hemal Savai in Mumbai at at hsavai@bloomberg.net

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