Inflation report spells bad news for India stocks

Mumbai: Most Indian stocks fell after a report showed inflation had accelerated more than economists expected. State Bank of India led the drop.

State Bank fell 1.6 per cent after consumer prices rose at the fastest pace in 16 months in February.

Tata Consultancy Services rose 2.6 per cent after signing an accord with Malaysian Airline System Bhd to provide information technology services.

The Bombay Stock Exchange's Sensitive Index, or Sensex, was little changed at 17,164.99 after swinging between gains and losses at least 18 times.

Financial companies in the gauge dropped 1 per cent. The S&P CNX Nifty Index on the National Stock Exchange lost 0.2 per cent to 5,128.90. The BSE 200 Index declined 0.3 per cent to 2,151.16.

State Bank lost 1.6 per cent to Rs2,015.1. ICICI Bank declined 1.4 per cent to Rs923.75. Housing Dev-elopment Finance, a mortgage lender, fell 1.5 per cent to Rs2,675.25.

The benchmark wholesale-price index climbed to 9.89 per cent from a year earlier, following an 8.56 per cent increase in January, the Commerce Ministry said yesterday. The median forecast of 20 economists in a Bloomberg news survey was for a 9.69 per cent gain.

Bonds rose after the inflation report. Sanjay Arya, treasurer at state-owned Bank of Maharashtra in Mumbai predicted the central bank may raise its reverse repurchase rate, at which it absorbs cash from banks, and its repurchase rate by 50 basis points each at its policy meeting on April 20.