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Photographer: Prashanth Vishwanathan/Bloomberg

A waiter serves coffee and other beverages on the terrace of the India Coffee House in New Delhi. Consumer prices rose a more-than-estimated 11.24 percent in November from a year earlier, data yesterday showed. Close

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Photographer: Prashanth Vishwanathan/Bloomberg

A waiter serves coffee and other beverages on the terrace of the India Coffee House in New Delhi. Consumer prices rose a more-than-estimated 11.24 percent in November from a year earlier, data yesterday showed.

Indian stocks fell, with the benchmark gauge having its steepest weekly loss in a month, as faster-than-estimated inflation sparked expectations the central bank will raise interest rates in the coming week.

ICICI Bank Ltd. (ICICIBC), the country’s second-biggest lender, sank the most in almost 12 weeks today. Bharat Heavy Electricals Ltd. (BHEL), India’s largest power-equipment maker, slid for a fourth day. Engineering company Larsen & Toubro Ltd. (LT) lost 1.4 percent. The rupee weakened 0.6 percent against the dollar.

The S&P BSE Sensex (SENSEX) retreated 1 percent to 20,715.58 at the close in Mumbai. The gauge fell 1.3 percent this past week, its first drop in three weeks.

Consumer prices rose 11.24 percent in November from a year earlier, data yesterday showed, compared with the 10 percent gain analysts had predicted. Most economists in a Bloomberg survey now expect Reserve Bank of India Governor Raghuram Rajan to increase the benchmark repurchase rate to 8 percent from 7.75 percent in a decision due Dec. 18.

“The data is creating flutter in the market, and its influence will be seen as to what the RBI governor will say next week,” Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services Ltd., said on Bloomberg TV India today. “A 25 basis point rate increase is on the cards, but anything more will see more downside.”

Photographer: Prashanth Vishwanathan/Bloomberg

Commuters board buses during the morning rush hour at a bus stop outside the Maharana Pratap Inter-state bus terminus (ISBT) at Kashmiri Gate in New Delhi. Close

Commuters board buses during the morning rush hour at a bus stop outside the Maharana... Read More

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Photographer: Prashanth Vishwanathan/Bloomberg

Commuters board buses during the morning rush hour at a bus stop outside the Maharana Pratap Inter-state bus terminus (ISBT) at Kashmiri Gate in New Delhi.

Wholesale price inflation data for November are due to be released on Monday, Dec. 16. WPI held unchanged at 7.0 percent from the month before, according to the median of analysts surveyed by Bloomberg.

Banks, BHEL Fall

Rajan has raised the main interest rate twice since he moved to the central bank in September to fight rising prices.

‘We are very uncomfortable with the current level of inflation,’’ Rajan told reporters in Kolkata yesterday after the CPI data were released. “We are aware of the weak economy, but we also have to take into account inflationary pressures.”

ICICI Bank tumbled 4.2 percent to 1,085 rupees. State Bank of India, the nation’s biggest lender, dropped 1.9 percent. The 13-member S&P BSE Bankex decreased 2.3 percent to its lowest level since Dec. 4. Housing Development Finance Corp. (HDFC), the biggest mortgage lender, retreated 2.4 percent.

Bharat Heavy Electricals sank 4.1 percent, extending this week’s loss to 9.8 percent, the most on the Sensex. Larsen & Toubro dropped for the fourth day after climbing to a four-month high on Dec. 9.

Tata Motors

Tata Motors Ltd. (TTMT), the owner of Jaguar Land Rover, rallied 2.8 percent after tumbling the most since February yesterday. Its 14-day relative strength index had fallen to 35 yesterday. Some investors see readings below 30 as a signal to buy. For the week, Tata Motors declined 5.3 percent, its biggest drop in almost nine months.

The Sensex rose to a record Dec. 9 after the Bharatiya Janata Party won the state elections, giving it momentum to end the ruling Congress party’s decade-long rule in polls due by May and install Narendra Modi as prime minister. Modi is credited with achieving higher growth than the national average and increasing power capacity more than fivefold in his home state of Gujarat since becoming chief minister in 2001.

Global investors bought a net $160 million of local shares on Dec. 11, taking this year’s inflows to $18.7 billion, the most in Asia after Japan, data from the market regulator show.

The Sensex has climbed 6.6 percent this year, the best performer among the four largest emerging markets, and trades at 13.5 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.4 times.

The CNX Nifty Index decreased 1.1 percent to 6,168.40. The India VIX rose 0.6 percent.

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

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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