Mumbai: Indian stocks fell for a sixth day, the longest stretch of losses in a year, as lenders and carmakers declined amid growing concern the government will fail to meet its fiscal deficit targets.
The BSE India Sensitive Index, or Sensex, retreated 0.9 per cent to 18,309.37, the lowest close since September 13. The S&P CNX Nifty Index on the National Stock Exchange of India Ltd lost 1 per cent to 5,574.05. State Bank of India, the nation’s biggest lender, fell 2.1 per cent. Tata Motors Ltd, India’s the owner of Jaguar and Land Rover, slid the most in two weeks.
The Sensex erased an advance of 0.5 per cent as European stocks declined and as Finance Minister Palaniappan Chidambaram told reporters in New Delhi that it was too early to say the deficit goal won’t be reached. The government raised less than 25 per cent of its target yesterday from selling mobile-phone airwaves, a sale Chidambaram was counting on to help avert a credit-rating downgrade and narrow the budget deficit.
“There’s doubt,” Sunil Pachisia, vice president at Pratibhuti Viniyog Ltd, said by phone today. “The finance minister’s comments on fiscal deficit were unconvincing.”
The Sensex dropped 3.1 per cent the past six days, a streak that is the longest since the eight days to November 21. The gauge is valued at 14.9 times estimated profit, more than the MSCI Emerging Markets Index’s multiple of 11.2.
Speculation the central bank will delay interest-cuts also dragged stocks lower today after Reserve Bank of India Governor Duvvuri Subbarao said inflation is still at an elevated level. The benchmark inflation gauge had eased to an eight month-low in October.
