Stocks hit one-month low on concern over rate hike

Mumbai: India's stocks fell to a one-month low on speculation the central bank will tighten monetary policy after China sought to cool its property market, and as US regulators filed a suit against Goldman Sachs Group.

DLF, India's biggest developer, and Tata Steel, the largest producer of the alloy, dropped the most in two months. India's central bank may raise interest rates for the second time in a month to tame the fastest inflation among Group of 20 nations, according to Bloomberg News Survey of economists.

The Bombay Stock Exchange's Sensitive Index, or Sensex, lost 190.50, or 1.1 per cent, to 17,400.68, extending last week's 1.9 per cent retreat. The gauge slid for a fifth day, its longest losing streak since Jan. 27, after the US Securities and Exchange Commission sued Goldman Sachs for fraud tied to collateralized debt obligations and Britain and Germany said they will study the firm's transactions.

India's "stock markets will be impacted through risk aversion," said Aneesh Srivastava, the Mumbai-based chief investment officer who manages $247 million (Dh908.46 million) at IDBI Fortis Life Insurance Co. "If global investors start withdrawing money and become risk averse, then that would be a concern."

The S&P CNX Nifty Index on the National Stock Exchange lost 1.1 percent to 5,203.65. The BSE 200 Index retreated 1 percent to 2,190.57. DLF slid 4.1 per cent to Rs316.65. Tata Steel declined 3.7 per cent to Rs669.8, its biggest drop since February 8.