BLBG India’s Stock Gauge Falls Most in Week, Led By Metals Producers
Aug. 17 (Bloomberg) -- India’s benchmark stock index fell the most in more than a week, led by Sterlite Industries (India) Ltd., after metal prices dropped on concerns a recent rally isn’t justified by economic prospects.
Sterlite, the nation’s biggest copper producer, retreated 4.4 percent as the metal declined for a second day, extending its slide from a 10-month high after U.S. stocks dropped. Tata Steel Ltd., the largest producer of the alloy, dropped 2.9 percent. Hindalco Industries Ltd., the No. 1 aluminum producer, lost 3.8 percent.
“Metal prices have run ahead of fundamentals,” said Niraj Shah, a Mumbai-based analyst at Centrum Broking Pvt. “The demand for metals is not as much as anticipated. Even in India demand is likely to come down.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 303.02, or 2 percent, to 15,108.61 at 10:19 a.m. in Mumbai, its steepest slump since Aug. 7. The S&P CNX Nifty Index on the National Stock Exchange lost 2.1 percent to 4,486.25. The BSE 200 Index decreased 1.9 percent to 1,854.02.
Sterlite fell 4.4 percent to 635.5 rupees. Tata Steel declined 2.9 percent to 456.2 rupees. Hindalco slid 3.8 percent to 104.25 rupees.
U.S. equities retreated after consumer confidence unexpectedly declined this month amid growing concern over jobs and wages, according to data released on Aug. 14. Copper, used in homes and power grids, has jumped about 15 percent in the past month, driven by speculation of an economic recovery.
Copper Slides
Three-month delivery copper fell as much as 2.9 percent to $6,065 a metric ton on the London Metal Exchange, and traded at $6,070 a ton in Singapore. The contract had climbed to the highest since Oct. 1 last week.
Among other LME-traded metals, aluminum lost 2.5 percent to $1,940 a ton, lead retreated 1.5 percent to $1,825 a ton, zinc slid 1.4 percent to $1,800 a ton, nickel fell 2.5 percent to $19,080 a ton and tin was 1.4 percent down at $14,300 a ton.
Elsewhere, Asian stocks dropped for the first time in three days after an unexpected decline in a U.S. consumer confidence index raised concern about the strength of a revival in global growth.
The MSCI Asia Pacific Index lost 1.3 percent to 112.76 in Tokyo. The gauge has climbed 60 percent from a five-year low on March 9 on speculation stimulus policies and lower interest rates around the world will help revive the global economy.
Japan’s Nikkei 225 Stock Average fell 2 percent even as a government report showed the country’s economy grew for the first time in five quarters.
Overseas funds sold a net 1.11 billion rupees ($22.9 million) of Indian stocks on Aug. 12, the Securities & Exchange Board of India said on its Web site. The funds have bought 356.3 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.
