Sensex Index Retreats From Highest Level in a Month; ICICI Bank Leads Drop

India’s benchmark stock index fell from its highest level in a month after Moody’s Investors Service reduced Greece’s credit rating to junk, renewing concern a global economic recovery may stall.

ICICI Bank Ltd., the second-largest lender, dropped for the first day in five. Jaiprakash Associates Ltd., a dam builder, lost 1.6 percent. Moody’s cut Greece’s grade by four steps to junk. Reliance Communications Ltd., a mobile phone operator, rose to a four-month high after saying it’s in “advanced talks” to sell stakes in its tower unit.

“There’ll be some withdrawals from equities because of concerns about Europe and investors may hold cash,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi, southern India. “We can expect stock- specific buying.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 30.19, or 0.2 percent, to 17,307.98 as of 1:01 p.m. local time, retreating for the first day in five. The S&P CNX Nifty Index on the National Stock Exchange lost 0.2 to 5,189.50. The BSE 200 Index was little changed at 2,195.67.

ICICI Bank declined 1.6 percent to 840.3 rupees. State Bank of India, the nation’s largest, lost 0.9 percent to 2,325 rupees. Jaiprakash, India’s biggest builder of dams, declined 1.8 percent to 121.2 rupees.

Reliance Communications

Moody’s cut Greece’s debt rating to Ba1 from A3, citing “substantial” risks to growth by austerity measures caused by a 110 billion-euro ($134.5 billion) aid package from the European Union and International Monetary Fund.

Reliance Communications climbed 2.3 percent to 183.25 rupees, poised for its highest close since Jan. 21. The company controlled by billionaire Anil Ambani is talking with local and overseas parties for a cash and stock transaction for Reliance Infratel Ltd., according to an an e-mailed statement yesterday.

Hindustan Copper Ltd. surged 11 percent to 522.2 rupees. The government will sell a 10 percent stake in Hindustan Copper followed by a company offering of a further 10 percent, Corporate Affairs Minister Salman Khurshid said today.

Overseas investors bought a net 8.96 billion rupees ($191 million) of Indian equities on June 11, increasing total purchases of the stocks this year to 230.4 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:

Balaji Telefilms Ltd. (BLJT IN), a producer of television shows, climbed 3.3 percent to 59.8 rupees. Reliance Big Entertainment Ltd., a unit of the Anil Dhirubhai Ambani Group, may buy a 26 percent stake in the company from Star India, VCCircle’s website said, citing people it didn’t identify.

Balaji Telefilms’ Chief Financial Officer Sunil Shahani couldn’t immediately be reached at his office telephone for comment on the report.

BOC India Ltd. (BOCI IN), a maker of industrial gases, soared 20 percent to 287.45 rupees. Linde Holdings Netherlands BV proposed delisting the company from Indian exchanges by buying shares held by public holders, according to BOC India’s stock exchange filing.

Ennore Coke Ltd. (ENNC IN), a power generator, advanced 8.4 percent to 96.8 rupees, poised for its highest close in two months, after 36.8 percent of its shares changed hands in two block transactions on the Bombay Stock Exchange. Buyers and sellers weren’t immediately known.

MMTC Ltd. (MMTC IN), a state-run trading company, surged 22 percent, the most since at least July 2002, after saying it will consider a proposal on June 29 to issue free shares and split its stock.

Orbit Corp Ltd. (ORB IN), a real estate company, climbed 3.5 percent to 257.8 rupees. Amit Agarwal, an analyst at Daiwa Securities Capital Markets, rated the stock as “buy” in new coverage.

To contact the reporter on this story: Margo Towie in Mumbai on mtowie@bloomberg.net

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