Bloomberg

Mumbai

Indian stocks fell for a sixth day, sending the benchmark index to a four-week low, as the rupee weakened before a report that economists forecast will show inflation accelerated last month.

Tata Motors, owner of Jaguar Land Rover, declined to a one-month low. Copper producer Sesa Sterlite slid the most in seven weeks. ICICI Bank fell 2.4%. Reliance Communications decreased the most in three months. The rupee weakened to an eight-week low.

The S&P BSE Sensex lost 1% to 20,281.91, the lowest close since October 10. Consumer prices climbed 9.9% last month, after a 9.84% gain in September, according to the median of 32 estimates in a Bloomberg News survey before data due later yesterday. The Sensex has fallen every day since climbing to a record in a special Diwali trading on November 3. The currency has dropped 4.1% in the past month.

“We will look to redeploy funds when we see stability in the rupee,” Aadil Ebrahim, a Hong Kong-based portfolio manager at Bowen Asia, said in an interview on Bloomberg TV India yesterday. “We don’t have the conviction that we are completely out of the woods yet.”

The rupee retreated 0.7% to 63.6950 per dollar, the weakest level since September 10. The currency has fallen for five days as better-than-forecast US jobs data last week fuelled speculation the Federal Reserve will cut stimulus sooner than anticipated.

“With inflationary pressures rising, we do not rule out the possibility of another 25 basis point” hike in the repurchase rate by March, said Tirthankar Patnaik, a strategist at Religare in Mumbai. The timing of a paring of US stimulus “will be the key to the rupee’s movement in the next couple of months,” he said.

The yield on the 7.16% government bonds due May 2023 rose 10 basis points today, or 0.10 percentage point, to 9.05%, according to prices from the central bank’s trading system. The rate climbed as high as 9.14% yesterday, the highest level since Aug. 19.

Global funds sold more Indian bonds than they bought every day last week, exchange data show.

One-month implied volatility in the rupee, a gauge of expected moves in the exchange rate used to price options, climbed 82 basis points to 13.94%. Three-month onshore rupee forwards dropped 0.6% to 65.27 per dollar, data compiled by Bloomberg show. Offshore non-deliverable contracts declined 0.8% to 65.68.

The Fed’s monthly bond-buying programme helped spur $2.9bn of net inflows into Indian equities in October.

Yesterday Tata Motors plunged 4.5%, trimming the year’s gain to 15%. Engineering company Larsen & Toubro lost 1.6%. Bharat Heavy Electricals, the nation’s top power- equipment maker, slid to its lowest level since September 24.

Sesa Sterlite dropped 3.4%, the biggest loss since September 20. ICICI Bank declined for the seventh day, losing 2.4%. State Bank of India decreased 1.8%.

Reliance Communications tumbled 5.2% to Rs129.20. Second-quarter profit rose more than six-fold, beating estimates, the company said after trading ended.

India’s factory output climbed 3.5% in September, after a 0.6% increase the previous month, a separate Bloomberg survey shows. The data was due later yesterday.

Global funds bought a net $49.1mn of local shares on November 11, a 26th day of purchases, data from the regulator show. That took this year’s inflows to $16.6bn, the most after Japan among 10 Asian markets tracked by Bloomberg.

The Sensex has gained 4.4% this year and trades at 13.4-times projected 12-month earnings, the cheapest in more than two months. The MSCI Emerging Markets Index is valued at 10.6 times forecast profits.

The CNX Nifty Index decreased 1% to 6,018.05. The India VIX surged 4.4%.