Mumbai: India's benchmark stock index fell, halting a two-day advance, after the central bank raised interest rates for a sixth time this year to combat inflation and tightened home-loan rules to slow a property-market rally.
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 9.94, or less than 0.1 per cent, to 20,345.69 at the 3:30pm (local time) close in Mumbai. The gauge swung between gains and losses at least 30 times after the central bank said the likelihood of further monetary policy tightening in the "immediate future is relatively low."
DLF Ltd., the nation's biggest developer, led declines by property-related stocks after lending requirements for home loans were tightened. ACC Ltd., the biggest cement maker, climbed for a second day after its October sales jumped 14 per cent. Tata Motors Ltd., the biggest truckmaker and owner of Jaguar Land Rover, retreated to the lowest in more than a week.
"Rate increase was necessary to bring down inflation," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance Co here. "It's also a preemptive step to control inflation rising out of commodity price increases, which may happen post the quantitative easing in developed world," he added.
The S&P CNX Nifty Index on the National Stock Exchange closed little changed at 6,119. The BSE 200 Index gained 0.2 per cent to 2,588.29.
DLF slid 3.4 per cent to Rs349.2 (Dh28.90), its steepest drop since August 27. Unitech Ltd, the second-biggest developer, also lost 3.4 per cent to Rs86.25.
