Indian (SENSEX) stocks retreated for a second day, led by lenders and energy companies, amid speculation a rally in crude oil to a five-week high will stoke inflation.
ICICI Bank Ltd. (ICICIBC) lost 1.8 percent, sending a measure of banks to its biggest drop in a week. Hindustan Petroleum Corp. (HPCL) and Bharat Petroleum Corp. (BPCL), the nation’s largest state-owned refiners, declined at least 1.5 percent.
The S&P BSE Sensex slid 0.2 percent to 20,808.98 at 9:59 a.m. in Mumbai. Higher oil increases import costs for a nation that buys about 80 percent of its oil from abroad. Reserve Bank of India Governor Raghuram Rajan has raised the main interest rate twice after he moved to the central bank in September to fight rising prices.
West Texas Intermediate crude advanced for a fourth day, the longest rising streak since August, as TransCanada Corp. said it will start operating part of its Keystone XL pipeline in January and industry data showed U.S. oil supplies declined. Futures climbed as much as 1.4 percent in New York.
The CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. fell 0.3 percent to 6,183.50.
The Sensex has climbed 7 percent this year, the best performer among the four largest emerging markets, and trades at 13.6 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.5 times.
Overseas investors have purchased a net $ 17.59 billion of Indian equities this year, the most in Asia after Japan, data compiled by Bloomberg show. They bought a net $ 1.1 billion of stocks in November, the third monthly inflow, the data show.
India’s local elections for five regions that were held in phases ends today.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net
To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net
National Stock Exchange of India
Dhiraj Singh/Bloomberg
Boys fly a kite in front of the National Stock Exchange of India (NSE) building in the Bandra Kurla Complex in Mumbai.
Boys fly a kite in front of the National Stock Exchange of India (NSE) building in the Bandra Kurla Complex in Mumbai. Photographer: Dhiraj Singh/Bloomberg