Indian Stocks Decline for Fourth Day, Led by Lenders, Carmakers
Indian (SENSEX) stocks dropped for a fourth day before the monthly inflation report. Lenders and carmakers led the declines.
The S&P BSE Sensex slid 0.1 percent to 19,336.7 at 11:11 a.m. in Mumbai, with volumes exceeding the 30-day average by 33 percent at this time of day. ICICI Bank Ltd. (ICICIBC) and HDFC Bank Ltd., (HDFCB) the nation’s two biggest non-state lenders, declined on a money- laundering report. Tata Motors Ltd. (TTMT), the owner of Jaguar Land Rover, fell for a second day.
Consumer prices rose 10.91 percent last month from a year earlier, compared with a 10.79 percent increase in January, official data showed March 12. Wholesale-price inflation will ease to 6.59 percent from 6.62 percent, the slowest pace since 2009, according to the median of 29 estimates in a Bloomberg survey before data due around noon in New Delhi today. Price pressures are “still high and stubborn,” Reserve Bank of India Governor Duvvuri Subbarao said in London yesterday. The authority meets to set monetary policy on March 19.
“We don’t expect a very aggressive rate cut, at best it could be 25 basis points,” D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd., which has about $100 million in assets, said by phone from New Delhi. “Inflation continues to be sticky.”
The RBI cut its benchmark rate 25 basis points to 7.75 percent on Jan. 29, the first reduction in nine months. Nine of 10 analysts in another Bloomberg survey predict Subbarao will lower the rate to 7.5 percent from 7.75 percent on March 19.
ICICI Bank lost 0.1 percent to 1,084.55 rupees, HDFC Bank decreased 0.5 percent to 631.8 rupees and Axis Bank Ltd. (AXSB) fell 0.9 percent to 1,334.85 rupees. The stocks retreated after Cobrapost.com released a report saying the three lenders were involved in money laundering.
“We have constituted a high level inquiry committee to investigate into the matter and submit its findings in two weeks,” ICICI Bank spokesman Kausik Datta said in an e-mail today. HDFC Bank spokesman Neeraj Jha and Axis Bank spokesman Julius Samson didn’t answer calls made to their mobile phones.
“It seems to be a knee-jerk reaction to the reports by Cobrapost,” SMC’s Aggarwal said.
Tata Motors slid 1.5 percent to 296.45 rupees. Aluminum maker Hindalco Industries Ltd. (HNDL) lost 1.2 percent to 94.7 rupees.
The S&P CNX Nifty Index of the National Stock Exchange of India slid 0.3 percent to 5,832.75. India VIX, which measures the cost of protection against losses in the Nifty, increased 0.9 percent to 16.35.
The Sensex slumped 5.2 percent in February, its first drop in four months and the biggest monthly fall since May, as more index companies missed earnings estimates in the three months ended Dec. 31 and the economy expanded in the quarter at the slowest pace in almost four years.
Overseas funds still bought a net $144 million worth of shares on March 12, taking their net investment in domestic equities this year to $9.3 billion, a record for the period, data compiled by Bloomberg show. Foreigners purchased a net $24.5 billion worth of shares last year, the most among 10 Asian markets tracked by Bloomberg.
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