By Rajhkumar K Shaaw April 16 (Bloomberg) -- India’s stocks fell, with the benchmark index set for its first weekly decline in 10 weeks, on speculation the central bank will tighten monetary policy next week after China announced measures to cool its property market. DLF Ltd., India’s biggest developer, retreated from an 11- week high. Housing Development Finance Corp., the biggest mortgage lender, dropped for a fourth day. The nation’s inflation rate held at a 17-month high in March, a report yesterday showed, increasing pressure on the Reserve Bank of India to raise interest rates at its April 20 quarterly meeting. “Investors are being a little cautious,” said Apurva Shah, head of research at Prabhudas Lilladher Pvt. “Uncertainty around the quantum of a rate increase, corporate earnings and food inflation are weighing on the markets.” The Bombay Stock Exchange’s Sensitive Index, or Sensex, dropped 46.25, or 0.3 percent, to 17,593.01 at 10:55 a.m. in Mumbai. The gauge has declined 1.9 percent this week. The S&P CNX Nifty Index on the National Stock Exchange lost 0.2 percent to 5,263.75. The BSE 200 Index retreated 0.2 percent to 2,215.99. DLF slid 2 percent to 331.3 rupees. Housing Development retreated 1.2 percent to 2,656.9 rupees, poised for its lowest level since March 30. China yesterday raised ratios on down payments for some home purchases, saying “more forceful” steps are needed to cool speculation. Growth Consolidating India’s economic growth in the first quarter accelerated to the fastest pace in almost three years. Most companies are due to give their quarterly earnings reports within the next three weeks, with the median of estimates submitted by analysts for the 30 Sensex-member companies showing average profit growth of 20 percent, according to data compiled by Bloomberg. India’s inflation rate was 9.9 percent in March, a Commerce Ministry report showed yesterday. Central bank Governor Duvvuri Subbarao may tighten lending to curb price gains, finance ministry officials said this week. Inflationary pressure in India may remain until June, Finance Minister Pranab Mukherjee said yesterday. Expansion in Asia’s third-biggest economy after Japan and China is “consolidating,” Subbarao said March 22. Prime Minister Manmohan Singh aims to boost growth to 10 percent. Reliance Falls Reliance Industries Ltd., India’s most valuable company, lost 0.9 percent to 1,080.7 rupees, extending yesterday’s 2.7 percent slide. Hardy Oil & Gas Plc, a U.K. explorer focused on India, cut by 51 percent the prospective resource estimate in a natural gas field off India’s east coast operated by Reliance, its partner in the project, Hardy said in an April 14 statement. Manoj Warrier, a spokesman for Reliance, declined to comment when reached by telephone in Mumbai today. Overseas investors bought a net 6.08 billion rupees ($136 million) of Indian stocks on April 13, taking their total purchases of the equities this year to 253.7 billion rupees, according to the nation’s market regulator. Foreign funds have been net buyers of stocks for 28 straight trading days, the longest streak of inflows since August 2005, after Mukherjee on Feb. 26 pledged to trim the fiscal deficit from a 16-year high. Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years earlier in domestic currency terms, as the biggest rally in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline. The following were among the most active on the exchange: CMC Ltd. (CMC IN) gained 1.2 percent to 1,494 rupees. The computer software service provider said fourth-quarter profit rose 15 percent to 443 million rupees, the company said in a statement to the Bombay Stock Exchange. Goenka Diamond and Jewels Ltd. (GDJ IN) sank 20 percent 108.7 rupees as the diamond jewelry maker commenced trading on Indian stock exchanges. The company raised 1.35 billion rupees selling 10 million shares to the public at 135 rupees a piece. To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

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