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Sterlite Industries, Hindalco Lead Indian Stocks to Biggest Fall in a Week
Indian stocks fell the most in a week, led by Sterlite Industries (India) Ltd. and the nation’s biggest raw-material producers, as metal prices fell on concern global growth may falter and hurt demand for commodities.
Sterlite Industries, the nation’s largest copper and zinc producer, and Hindalco Industries Ltd., the biggest aluminum producer, dropped ahead of a U.S. home sales report due later today that may provide more evidence the world’s largest economy is faltering. Sterlite also declined after the government rejected its parent’s plan to mine in the state of Orissa.
“There is a concern on U.S. growth,” said Avinash Gupta, an analyst at Bonanza Portfolio Ltd., a New Delhi-based brokerage. “The most optimistic scenario is of a slowdown in the U.S., and it’s oscillating between slowdown and double-dip. Information-technology spending may remain muted.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 93.82, or 0.5 percent, to 18,315.53 at 12:57 a.m. in Mumbai, the biggest decline since Aug. 16. The S&P CNX Nifty Index on the National Stock Exchange lost 0.6 percent to 5,509.05. The BSE 200 Index retreated 0.5 percent to 2,353.54.
Sterlite sank 4.2 percent to 151.95 rupees. India’s environment ministry rejected Vedanta Resources Plc’s proposal to mine bauxite in Orissa, hampering the U.K.-based company’s plan for an $8 billion aluminum expansion. The government will issue a show-cause notice and take penal action against Vedanta for violating various laws, Minister for Environment and Forests Jairam Ramesh said today in New Delhi.
Metal Prices Fall
A gauge of raw-material producers in the MSCI Asia Pacific Index dropped 1.4 percent, the most among 10 industry groups. Copper futures in New York sank 0.7 percent in after-hours trading. Hindalco, which controls U.S.-based Novelis Inc., slid 2.4 percent to 169.95 rupees.
Infosys Technologies Ltd., the second-largest software services provider that gets two thirds of its sales from North America, retreated 1.4 percent to 2,764.2 rupees, while Wipro Ltd., the nation’s third-biggest software exporter, slid 0.2 percent to 412 rupees.
Foreign fund inflows to India’s equities have climbed 69 percent this year, making the Sensex the most expensive in Asia and the BRIC markets, which include China, Brazil and Russia. The Sensex, which is extending last year’s biggest rally in 18 years, is trading at 17.6 times estimated profit.
Overseas funds bought a net 7.14 billion rupees ($153.3 million) of Indian equities on Aug. 20, raising total investments in the stocks this year to 583.7 billion rupees, according to the nation’s market regulator.
Record Inflows
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance 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:
Lenders: State Bank of Travancore (SBTR IN) soared 7 percent to 963 rupees. The lender controlled by India’s biggest bank surged to a record after its parent agreed to combine with another unit, State Bank of Mysore. The move fueled speculation the State Bank of India may also acquire the lender based in the state of Kerala, said Deepak Tiwari, an analyst at K.R. Choksey Shares & Securities Pvt. State Bank of Mysore (SBMS IN) advanced 14 percent to 1,265.15 rupees and State Bank of Bikaner & Jaipur (SBBJ IN) added 12 percent to 769.95 rupees.
Jaiprakash Power Ventures Ltd. (JPVL IN) declined 0.5 percent to 66.25 rupees. The electricity generator was cut to “neutral” from “outperform” by Credit Suisse Group AG, which cited the risk of equity issuance given the outlook for the company’s debt level. The brokerage cut its share-price estimate to 71 rupees from 95 rupees, according to a report by Amish Shah, an analyst at Credit Suisse.
Cairn India Ltd. (CAIR IN) surged 3.5 percent to 355.65 rupees. The operator of the nation’s biggest oilfield on land found oil and gas in the Nagayalanka-1Z well in an onshore area in the Krishna-Godavari basin, the company said in a statement to the Bombay Stock Exchange.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net.
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