Indian index slides as bribe case causes pain

Mumbai: Indian stocks fell, driving the benchmark index to its longest stretch of weekly declines since February, as lenders began reviewing loans to companies named by investigators in a bribery probe.

"The pain is huge, it's not going to go away in a hurry," said Arun Kejriwal, a director at Kejriwal Research & Investment Services Pvt. in Mumbai.

"Investors are taking money off the table as it's not clear where this is going to stop." Kejriwal expects the Sensex to decline to as low as 18,700.

DLF Ltd, India's biggest real estate developer, slid for a fourth day. Reliance Infrastructure Ltd. dropped to its lowest level in 18 months. Neither company has been named in the probe. Finance Minister Pranab Mukherjee asked state-lenders to check their "exposures" to companies named in the investigation. Credit default swaps climbed the most since June amid concern the probe will find evidence of bad loans.

The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 181.55, or 0.9 per cent, to 19,136.61. The measure has retreated 2.3 per cent last week, its third straight week of losses.

The S&P CNX Nifty Index on the National Stock Exchange dropped 0.8 per cent to 5,751.95. The BSE 200 Index slid 1.5 per cent to 2,395.93.

DLF, the biggest real estate developer, lost 1.7 per cent to Rs287.4, paring an earlier drop of as much as 12 per cent. Unitech Ltd, the second-biggest developer, slid 4.9 per cent to Rs59.9, its lowest close since May 2009.

Reliance Infrastructure, the builder of a mass rapid transit system in Mumbai, declined 6.1 per cent to Rs853.8.