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Most India Stocks Drop Before Derivatives Expiry; Bharti Falls

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Nov. 27 (Bloomberg) -- Most Indian stocks fell before the expiration of derivatives contracts tomorrow.

State Bank of India slid for the second day, pacing losses among lenders. Bharti Airtel Ltd., India’s largest mobile-phone operator, decreased to a two-month low. Wockhardt Ltd. tumbled the most in more than two months after the drugmaker was banned from selling some medicines in the U.S. Tata Motors Ltd. rose to a record. Nestle India Ltd. ended a six-day slide on reports that its parent plans to raise its stake in the local unit.

Sixteen stocks retreated and 14 advanced on the S&P BSE Sensex, which lost less than 0.1 percent to 20,420.26 at the close. The gauge changed direction at least 18 times. Indian derivatives contracts expire on the last Thursday of the month. Data due on Nov. 29 may show India’s economy grew 4.6 percent from a year ago in the quarter ended Sept. 30, according to a Bloomberg News survey, capping the longest quarterly stretch of sub-5 percent growth since 2005.

“The numbers on the ground do not suggest that one needs to be euphoric,” K. Ramanathan, chief investment officer at ING Investment Management Pvt., said on Bloomberg TV India today. “The market will remain range bound.”

State Bank slid 1.2 percent, taking this year’s loss to 26 percent. Yes Bank Ltd. decreased 1.7 percent, its first decline this week. The 13-member S&P BSE Bankex declined to its lowest level since Nov. 22.

Bharat Heavy lost 1.1 percent and Bharti Airtel retreated 1.6 percent, the worst performer on the Sensex.

Wockhardt, Tata Motors

Wockhardt plunged 8.3 percent to its lowest close since Aug. 22. The stock slumped as much as 14 percent earlier after the company’s biggest factory by revenue was added to the U.S. Food and Drug Administration’s list of restricted facilities.

Tata Motors rallied 2.3 percent to a record 399.20 rupees. The maker of the world’s cheapest car has rallied 28 percent this year and is the best-performing automaker on the Sensex.

The company “is our top pick in the auto space,” ING Investment’s Ramanathan said. “The company has given results in terms of volume growth, new launches have hit it off nicely and the company has started generating cash.”

Nestle India climbed the most in a month. Parent Nestle SA wants to increase stake in the local unit to 75 percent from 62.8 percent, CNBC-TV18 reported, citing Cogencis news agency. “Currently we have no plans to increase our stake,” Nestle SA spokesman Chris Hogg said in an e-mail to Bloomberg News.

The Sensex fell yesterday amid signs foreign investment in local stocks in slowing. Foreign funds were net buyers of an average $17 million of domestic shares a day in the five days through Nov. 26, data from the regulator show. That compares with an average inflow of $128 million a day in the previous 30 days starting Oct. 30. They have still bought $17.3 billion of shares this year, the most after Japan among 10 Asian markets tracked by Bloomberg.

The Sensex has risen 5.1 percent this year and is valued at 13.4 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.5 times.

The CNX Nifty Index decreased less than 0.1 percent to 6,057.10. The India VIX fell 2.1 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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