Indian stocks declined, with the benchmark index headed for its biggest three-day loss in nine months, as Prime Minister Narendra Modi’s government presented its first budget.

NTPC Ltd., India’s biggest power producer, dropped to its lowest level since May. Larsen & Toubro Ltd. (LT), the country’s largest engineering company, retreated for a third day. Oil & Natural Gas Corp. (ONGC) decreased 2.5 percent.

The S&P BSE Sensex (SENSEX) dropped 0.8 percent to 25,246.43 at 11:52 a.m. in Mumbai after rising as much as 0.7 percent at the start of Finance Minister Arun Jaitley budget speech. The gauge is poised for a three-day, 3.4 percent loss, the biggest since Sept. 24.

“Investors are selling as the budget has so far spelt out only long-term measures but nothing for the immediate term,” Jeetendra Panda, managing director of Peerless Securities Ltd., said in a phone interview. “No reformist measures have been announced yet.”

Modi’s two-month-old government kept budget deficit target unchanged despite concerns that oil and food prices will rise in a push to bolster public finances. The deficit will narrow to 4.1 percent of gross domestic product in the year to March 31, 2015, as projected by the previous administration, Jaitley said. The target is a seven-year low from the previous year’s 4.5 percent.

Local stocks have added about $ 200 billion of market value since Modi was elected in May pledging to curb inflation, encourage foreign investment and create manufacturing jobs.

Overseas investors bought a net $ 80.9 million of domestic shares on July 8, data compiled by Bloomberg show. That boosted this year’s inflows to $ 10.9 billion, the most among eight Asian markets tracked by Bloomberg.

The Sensex has surged 20 percent this year, the best performer among the world’s 10 biggest markets, and is valued at 15.5 times projected 12-month profits. The MSCI Emerging Markets Index is trading at a multiple of 11.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at; Santanu Chakraborty in Mumbai at

To contact the editors responsible for this story: Michael Patterson at Ravil Shirodkar