Indian stocks dropped to the lowest level in 28 months, extending four days of losses, on concern a weakening rupee will add to the costs of imported goods eroding corporate earnings and stalling economic growth. Reliance Industries Ltd. (RIL), India’s largest company, tumbled 3.2 percent, set for a second straight year of declines. Larsen & Toubro Ltd. (LT), the country’s biggest engineering company, slid to the lowest in more than 2 1/2 years. The two stocks have a combined 15 percent weighting on the BSE India Sensitive Index. (SENSEX) The rupee slid for a second day on concern Europe’s debt crisis will worsen, damping demand for the nation’s assets. The Sensex declined 1.3 percent to 15,189.41, according to preliminary closing prices in Mumbai. The gauge is set for the lowest close since Aug. 20, 2009. The gauge has lost 26 percent this year, the steepest loss among major Asian markets, as record increases in funding costs, high inflation and a falling rupee combined with Europe’s debt crisis to stall growth in the EU’s largest trading partner. Overseas funds sold a net 1.5 billion rupees ($28 million) of Indian equities on Dec. 16, taking their withdrawals this year to 21 billion rupees, according to the market regulator. To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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