India Stocks Drop on Earnings, Inflation Concern; Mahindra Falls

Indian stocks fell for a third day, led by automakers, after Mahindra & Mahindra Ltd. reported an unexpected drop in profit and as inflation exceeded estimates.

Mahindra & Mahindra, the nation’s largest maker of sport utility vehicles and tractors, tumbled the most in nine months. State Bank of India, the country’s biggest lender, slid to a five-week low.

The BSE India Sensitive Index, or Sensex, retreated 0.6 percent to 17,094.45, according to preliminary closing prices at the 3:30 p.m. in Mumbai, extending last week’s 2.1 slide. The Nifty Index on the National Stock Exchange of India Ltd. lost 0.4 percent to 5,148.35.

Ten out of 25, or 40 percent of companies on the Sensex that reported earnings for the September quarter, have trailed estimates, compared with 47 percent in the June quarter, data compiled by Bloomberg shown.

Benchmark wholesale-price index climbed 9.73 percent in October from a year earlier, the trade ministry said today. That compares with a 9.72 percent advance in September and the median forecast of 9.65 percent in a Bloomberg News survey.

Foreign funds, who withdrew $2.4 billion in August, the most since October 2008, have been net buyers for 10 sessions ended Nov. 9, the longest such streak in four months, data on the website of the regulator show. Inflows from abroad reached a record $29.4 billion in 2010.

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

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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