India’s stocks fell, with the benchmark index retreating 11 percent from its April 7 peak, as investors sold shares on concern Europe’s debt crisis will slow global economic growth.
Wipro Ltd., the nation’s third-biggest software services exporter, declined 2.2 percent. Tata Motors Ltd., a truckmaker with a unit in South Korea, dropped for the eighth day after a report that North Korea’s military is on combat alert. Overseas funds have sold a net $1.77 billion of the nation’s equities this month, on course for the most outflows since October 2008.
“There will be global variables such as the European crisis that will impact India,” Nilesh Shah, head of investments at ICICI Prudential Asset Management with $18.7 billion in assets, said in an interview with Bloomberg Television today. “The financial markets are hugely interlinked with global flows.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 447.07, or 2.7 percent, to 16,022.48, the lowest level in more than three months. The gauge’s retreat from its April peak marks the second time this year that the measure has retreated by at least 10 percent from a recent high. Some analysts consider a decline of that magnitude a correction.
The S&P CNX Nifty Index on the National Stock Exchange lost 2.8 percent to 4,806.75. The BSE 200 Index retreated 2.8 percent to 2,034.07.
Wipro declined 2.2 percent to 633.65 rupees, the lowest in more than five months. Tata Consultancy Services Ltd., the largest software services exporter, slid 2.5 percent to 699.55 rupees. The companies get more than a fifth of their sales in Europe.
Tata Motors, the owner of Jaguar Land Rover, sank 4.7 percent to 673.45 rupees, its lowest close since Feb. 25. The stock has lost 19 percent since May 13. The company owns Tata Daewoo Commercial Vehicle Co. in South Korea.
The MSCI Emerging Markets Index tumbled to the lowest since August after a dissident group, North Korea Intellectuals Solidarity, said that North Korean leader Kim Jong Il ordered his military to prepare for combat last week. Currencies weakened, borrowing costs jumped and commodities fell.
Sterlite Industries (India) Ltd., India’s largest copper producer, dropped 4.7 percent to 606.8 rupees. Hindalco Industries Ltd., the biggest aluminum producer, lost 5.4 percent to 137.75 rupees.
Copper dropped 2.3 percent to $6,750 a metric ton on the London Metal Exchange, poised for its steepest monthly drop since December 2008 after dropping 9.2 percent this month. Aluminum declined 2.8 percent to $2,025 a ton and nickel slumped 4.2 percent to $21,271 a ton.
Overseas investors sold a net 14.8 billion rupees ($313 million) of Indian equities on May 21, reducing their purchases of the stocks this year to 224 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
Hotel Leela Venture Ltd. (LELA IN), the hotelier aligned with Kempinski AG, tumbled 10 percent to 44.1 rupees, the steepest drop in more than 20 months. Full-year profit dropped 71 percent to 410.4 million rupees, according to the company’s stock exchange filing.
TV Today Network Ltd. (TVTN) sank 12 percent to 90.5 rupees, the most in more than three years. The news broadcaster was cut to “sell” from “hold” by Vikash Mantri, an analyst at ICICI Securities, after posting a fourth-quarter loss of 101 million rupees, compared with year-earlier profit of 81.2 million rupees.