Stocks hit two-week low on global, rate concerns

Mumbai : India's benchmark stock index fell to the lowest level in two weeks yesterday as investors sold riskier assets amid concerns global economic growth may be waning and domestic borrowing costs may be raised this month.

ICICI Bank Ltd, the country's second-biggest lender, declined 2.4 per cent. China's manufacturing growth slowed, fanning concern among investors that global expansion may cool. A measure of India's factory output remained at a level that suggests demand remains strong, adding to inflationary pressures. Sterlite Industries (India) Ltd., the biggest copper and zinc producer, followed metal prices lower.

"Global issues continue to stir negative sentiments," said A.N. Sridhar, who manages the equivalent of $17.2 million (Dh63.26 million) at Sahara Asset Management Co. in Mumbai. In India, it's "tough for the government to dictate policies that try to balance growth and contain inflation."

The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 191.57, or 1.1 per cent, to 17,509.33, the lowest since June 16. The gauge climbed 1 per cent in the three months ended June, completing its longest quarterly winning streak since at least September 1979, according to data compiled by Bloomberg.

The S&P CNX Nifty Index on the National Stock Exchange lost 1.2 per cent to 5,251.40. The BSE 200 Index retreated 0.8 per cent to 2,229.53.

ICICI Bank declined 2.4 per cent to Rs841.85, the lowest in two weeks. DLF Ltd., a real estate developer, fell 1.7 per cent to Rs283.85. Reports yesterday added to concerns a Chinese slowdown coupled with austerity measures in Europe may undermine the global economic recovery. In India, monetary policy makers may raise interest rates to stem inflation before or in a scheduled July 27 meeting, Central bank Deputy Governor K.C. Chakrabarty said on June 28.

A report yesterday from HSBC Holdings Plc and Markit Economics showed the India's Purchasing Managers' Index held above 50, a level that indicates a gain in factory production, for a 15th month in June.