India's benchmark stock index fell on concern the weakest monsoon rainfall in five years will slash farm output and spending.
Mahindra & Mahindra Ltd., the nation's largest tractor maker, slid 3.3 percent after the government said yesterday as many as 161 of India's 626 districts have been declared drought- prone. Jaiprakash Associates Ltd., the biggest maker of dams, lost 2.1 percent amid concern the country's 7 percent economic growth target may be jeopardized. Sterlite Industries (India) Ltd., the No. 1 copper producer, retreated 3 percent after metal prices declined.
"The rain gods continue to play hooky," said Rajeev Malik, a regional economist at Macquarie Group Ltd. in Singapore. A poor monsoon that results in a sizeable shortfall in farm production would "definitely reduce economic growth," he added.
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 280.7, or 1.9 percent, to 14,793.89 at 12:10 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange lost 1.5 percent to 4,403.95. The BSE 200 Index decreased 1.4 percent to 1,816.07.
Overseas funds sold a net 2.27 billion rupees ($47.5 million) of Indian stocks on Aug. 10, the Securities and Exchange Board of India said on its Web site. The funds have bought 350.4 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.
Mahindra lost 3.3 percent to 760 rupees. Jaiprakash fell 2.1 percent to 203.45 rupees.
Areas under rice cultivation have declined 20 percent to 22.82 million hectares, the farm ministry said. Agriculture makes up about a fifth of the Indian economy, according to IIFL Ltd. in Mumbai.
Metals Rise
"The monsoon concerns will not let the market go higher from here," said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. "There is no positive bias for the market."
A below-average monsoon may shave as much as one percentage point off India's growth in the year to March 2010, Raghuram Rajan, a former chief economist at the International Monetary Fund said on Aug. 10. India's economy, the third-largest in Asia, may expand 6 percent in the current fiscal year, Rajan said.
Sterlite retreated 3 percent to 616 rupees. Hindalco Industries Ltd., the biggest aluminum producer, fell 2.6 percent to 102.7 rupees. Tata Steel Ltd., the biggest producer of the alloy, lost 5 percent to 439.95 rupees.
Copper in Shanghai fell for the second day as a decline in China's new loan growth in July stoked concern that investment demand for the metal may slow. November-delivery copper on the Shanghai Futures Exchange fell as much as 1.2 percent.
A measure of six metals traded on the London Metals Exchange, comprising copper, aluminum, lead, tin, zinc and nickel, fell 2 percent yesterday.
The following are among the most active on the exchange:
Infosys Technologies Ltd. (INFO IN) lost 1.9 percent to 2,044.4 rupees. India's second-largest software exporter said it doesn't see an "explicit pickup" in information technology spending. Executives spoke at a technology conference in Boston yesterday.
Sun Pharmaceutical Industries Ltd. (SUNP IN) gained 1.9 percent to 1,231 rupees. India's most valuable drugmaker won approval from the U.S. Food and Drug Administration for an anti- cancer drug, the company said in a statement to the exchange.
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