Indian stocks dropped for the fifth day amid concern deficient seasonal rainfall will slow economic growth and hurt company earnings.
Mahindra & Mahindra Ltd. (MM), the nation’s largest producer of sport-utility vehicles and tractors, tumbled 1.7 percent. Bajaj Auto Ltd. (BJAUT), slid for the second day. Axis Bank Ltd. (AXSB) declined the most in a month. The BSE India Sensitive Index (SENSEX), or Sensex, fell 0.1 percent to 17,086.39, according to preliminary closing prices, the longest losing stretch since May.
India’s monsoon rains have been 21 percent below a 50-year average since June 1, threatening to reduce harvests and stoke food costs, data from the weather office show. Prime Minister Manmohan Singh is relying on higher farm output, which makes up about 15 percent of gross domestic product, to cool inflation and boost an economy growing at the weakest pace in nine years.
“If we don’t see a pick-up in the monsoon in the next few weeks then there is fear that the agricultural growth forecast could be downgraded further, which will mean an even lower GDP growth,” Toral Munshi, head of India equity research at Credit Suisse Wealth Management, told Bloomberg UTV today.
Overseas funds bought local shares for a 10th straight day on July 13, data from the market regulator showed yesterday, the longest run of net purchases since March. They have placed a net $9.9 billion in the nation’s stocks this year, the highest in Asia and a record for the period.
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