Mumbai: Most Indian stocks dropped as oil prices rose and the nation’s food inflation accelerated.
Tata Motors Ltd, India’s biggest truck maker and the owner of Jaguar Land Rover, fell to a nine-month low. Car sales grew at the slowest pace since May 2009 as higher borrowing costs and rising fuel prices damped demand.
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Oil climbed for a third day in New York. Food costs reached an eight-week high, adding pressure on the central bank to raise rates next week. State Bank of India (SBI), the biggest lender, fell the most in two weeks.
The Bombay Stock Exchange (BSE) sensitive index lost 9.39 points, or 0.05%, to 18,384.90. The gauge swung between advances and declines at least 15 times as about three stocks fell for every two that climbed.
Turnover on 6 June fell to a one-year low amid a sell-off that’s made the Sensex the worst-performing benchmark gauge in Asia this year.
“Low volumes are a function of haziness and reflect lack of direction,” said Sanjay Sinha, chief executive officer of L&T Mutual Fund. “Markets have factored in a 25 basis points increase in policy rates next week. Anything more will be a big concern.”
The S&P CNX Nifty on the National Stock Exchange lost 0.1% to 5,521.05. The BSE-200 Index slid 0.1% to 2,285.90.
Tata Motors dropped 0.7% to Rs1,021.15, its lowest close since 9 September. The stock has lost 22% this year after surging 65% last year. Car deliveries rose 7% to 158,817 from 148,425 a year earlier, the Society of Indian Automobile Manufacturers said on Thursday. Sales growth in the year to March 31, 2012, may slow to half the previous year’s 30% gain, the group said in May.
Maruti Suzuki (India) Ltd, the largest car maker, fell 0.7% to Rs1,215.05, extending Wednesday’s 1.3% loss. A strike at one of its plants entered the fifth day. SBI retreated 1.4% to Rs2,263.55.
Larsen and Toubro Ltd, the largest engineering company, added 1.4% to Rs1,725.95. NTPC Ltd, the biggest power producer, advanced 1.5% to Rs178.
Bharat Heavy Electricals Ltd, the biggest power equipment maker, rose 1.1% to Rs1,933.2 after saying it is bidding for contracts in Iraq, Iran and Africa, seeking to double the value of overseas orders by 2016.
Indian Oil Corp. Ltd, the nation’s biggest refiner, dropped 1% to Rs319. Bharat Petroleum Corp. Ltd lost 1.9% to Rs612.95 and Hindustan Petroleum Corp. Ltd sank 2.4% to Rs371.35. Rising crude increases revenue losses and debt for Indian refiners, which sell diesel, cooking gas and kerosene below cost. A meeting of ministers to consider fuel prices hasn’t been scheduled, Press Trust of India reported.
The Sensex has lost 10% on concerns that higher borrowing costs will crimp earnings. Rising consumer prices and a 36% rally in oil costs in the past year have forced the central bank to raise interest rates nine times in 15 months to tackle inflation. The South Asian country relies on imports to meet three-quarters of its energy demand.
Stocks on the Sensex are valued at an average 14.8 times estimated profit, down from 21.5 times in March 2010.
The Nifty may drop as much as 14% in the next three months after the gauge completes a so-called head-and-shoulders chart pattern, as per Angel Broking Ltd. If the index falls below 5,300, it will break through the so-called neckline of the bearish formation, tumbling as low as 4,770, Shardul Kulkarni, an analyst at Angel Broking, said in an interview in Mumbai.
Santanu Chakraborty in Mumbai and Tushar Dhara in New Delhi contributed to this story.