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India’s Sensex Drops to Four-Week Low Before Inflation Data

Nov. 12 (Bloomberg) -- Indian stocks fell for a sixth day, sending the benchmark index to a four-week low, as the rupee weakened before a report that economists forecast will show inflation accelerated last month.

Tata Motors Ltd., owner of Jaguar Land Rover, declined to a one-month low. Copper producer Sesa Sterlite Ltd. slid the most in seven weeks. ICICI Bank Ltd. fell 2.4 percent. Reliance Communications Ltd. decreased the most in three months. The rupee weakened to an eight-week low.

The S&P BSE Sensex lost 1 percent to 20,281.91, the lowest close since Oct. 10. Consumer prices climbed 9.9 percent last month, after a 9.84 percent gain in September, according to the median of 32 estimates in a Bloomberg News survey before data due later today. The Sensex has fallen every day since climbing to a record in a special Diwali trading on Nov. 3. The currency has dropped 4.1 percent in the past month.

“We will look to redeploy funds when we see stability in the rupee,” Aadil Ebrahim, a Hong Kong-based portfolio manager at Bowen Asia Ltd., said in an interview on Bloomberg TV India today. “We don’t have the conviction that we are completely out of the woods yet.”

The rupee retreated 0.7 percent to 63.6950 per dollar, the weakest level since Sept. 10. The currency has fallen for five days as better-than-forecast U.S. jobs data last week fueled speculation the Federal Reserve will cut stimulus sooner than anticipated. The Fed’s monthly bond-buying program helped spur $2.9 billion of net inflows into Indian equities in October.

Tata Motors, Bhel

Tata Motors plunged 4.5 percent, trimming the year’s gain to 15 percent. Engineering company Larsen & Toubro Ltd. lost 1.6 percent. Bharat Heavy Electricals Ltd., the nation’s top power-equipment maker, slid to its lowest level since Sept. 24.

Sesa Sterlite dropped 3.4 percent, the biggest loss since Sept. 20. ICICI Bank declined for the seventh day, losing 2.4 percent. State Bank of India decreased 1.8 percent.

Reliance Communications tumbled 5.2 percent to 129.20 rupees. Second-quarter profit rose more than sixfold, beating estimates, the company said after trading ended.

India’s factory output climbed 3.5 percent in September, after a 0.6 percent increase the previous month, a separate Bloomberg survey shows. The data is due today.

Global funds bought a net $49.1 million of local shares on Nov. 11, a 26th day of purchases, data from the regulator show. That took this year’s inflows to $16.6 billion, the most after Japan among 10 Asian markets tracked by Bloomberg.

The Sensex has gained 4.4 percent this year and trades at 13.4-times projected 12-month earnings, the cheapest in more than two months. The MSCI Emerging Markets Index is valued at 10.6 times forecast profits.

The CNX Nifty Index decreased 1 percent to 6,018.05. The India VIX surged 4.4 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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