The Bombay Stock Exchange. The Sensex lost 0.9% to 25,886.62 yesterday as metal producers dropped.

Bloomberg
Mumbai

Indian stocks declined for a second day, tracking Asian equities, after Federal Reserve chair Janet Yellen reinforced expectations of a rate increase this month.
Vedanta and Hindalco Industries, the largest copper and aluminium producers, slid for a second day this week. Oil & Natural Gas Corp fell the most in three weeks, while ITC, the biggest cigarette company, is on course for its first annual loss in seven years. Bharat Heavy Electricals, the top power-equipment maker, slid to a 21-month low.
The S&P BSE Sensex lost 0.9% to 25,886.62 at the close in Mumbai. Global funds pulled $1.1bn from Indian stocks last month amid an emerging market selloff on concern a rate increase in the US will curb demand for riskier assets.
“This is an interesting juncture for the global and local markets as couple of big events are coming up,” Mihir Vora, Mumbai-based chief investment officer at Max Life Insurance Co, which has $4.8bn in assets, said in an interview with Bloomberg TV India. While there’s “a consensus that the Fed will begin to hike rates, it looks like the approach will be more dovish,” he said. Vora said he’s bullish on road builders, railway contractors, construction-equipment makers and private banks.
In a speech at the Economic Club of Washington, Yellen warned that waiting too long to end the era of near-zero interest rates could force the central bank to tighten too quickly, which would risk disrupting financial markets and the six-year expansion. She is due to speak before the US Congress and November payrolls data is due today, probably the most- anticipated piece of American data before the Fed’s December 16 interest-rate decision.
Vedanta decreased 2.3%, ending a two-day, 4.8% advance. Hindalco slid 1.6%. Tata Steel tumbled the most since November 23, while Jindal Steel & Power lost 3.2%. Oil & Natural Gas fell 2.6%, the worst performer on Sensex yesterday. ITC lost 1.7%, taking this year’s decline to 6.9%.
Shares of hotels chains and airlines extended gains. EIH, which operates the Oberoi brand of luxury hotels, soared to a one-year high. Indian Hotels Co, which runs the Taj chain, capped the longest winning streak in a year. Jet Airways India increased to the highest since May 2013. InterGlobe Aviation added 1.3%.
“We’re seeing momentum in all aspects of hospitality, be it aviation or hotels,” Vineet Bhatnagar, managing director of PhillipCapital India in Mumbai, said in an interview with Bloomberg TV India.
‘‘There is a pick-up at the ground level, which is visible in the occupancy rates and airline load factors. We’re positive about this space with a short-term outlook of three to six months.” Global funds sold a net $22mn of local stocks on December 1. The Sensex has fallen 5.9% this year and trades at 15.3 times projected 12-month profits. The MSCI Emerging Markets Index is valued at a multiple of 11.2.
Meanwhile, the rupee dropped 0.2% in a second day of declines to 66.7350 a dollar, prices from local banks compiled by Bloomberg show. It weakened 2.1% last month in Asia’s worst performance as foreign holdings of local-currency bonds fell by the most since May.