By Rajhkumar K Shaaw June 22 (Bloomberg) -- India’s stocks fell the most in two weeks as investors withdrew funds from riskier assets after Fitch Ratings downgraded Paris-based BNP Paribas SA and Standard & Poor’s Rating Services said Spanish lenders face difficulty. Sterlite Industries (India) Ltd., the biggest copper and zinc producer, dropped 2.4 percent as raw material prices declined. Wipro Ltd., a software-services exporter that gets a fifth of its sales in Europe, declined the most in two weeks. Fitch cut its long-term credit-rating on BNP Paribas, France’s largest bank, while Standard & Poor’s slashed Spain’s economic growth forecast. “The euro zone is still a concern,” said Ambareesh Baliga, vice president of equities at Karvy Stock Broking Ltd. in Mumbai. “There is no tearing hurry to buy right away as valuations are getting stretched.” He advises investors to avoid shares in metal companies. The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 59.73, or 0.3 percent, to 17,816.82 at 9:57 a.m. in Mumbai, poised for its steepest decline since June 8. The S&P CNX Nifty Index on the National Stock Exchange lost 0.4 percent to 5,331.05. The BSE 200 Index retreated 0.4 percent to 2,244.25. Sterlite lost 2.4 percent to 178.6 rupees. Three-month delivery copper dropped as much as 2 percent on the London Metal Exchange. Hindalco Industries Ltd., the biggest aluminum producer, decreased 1.1 percent to 151.85 rupees. Tata Steel Ltd., the biggest producer of the alloy, retreated 1.1 percent to 499.4 rupees. Software Exporters Wipro, India’s third-largest software-services provider, declined 1 percent to 411.25 rupees. Infosys Techologies Ltd., the No. 2 that also gets about a fifth of its sales in Europe, lost 0.7 percent to 2,781 rupees. Fitch cited a “deterioration” of BNP Paribas’s asset quality for its one step cut to AA-. Standard & Poor’s lowered Spain’s economic growth forecast to an average 0.7 percent a year through 2016 from 1 percent, saying the countries banks face mounting credit losses and “substantial strain” on revenue generation. India’s Sensex has climbed 5.5 percent this month through yesterday as investors bought shares in companies that will benefit from expanding domestic demand. Shares in the gauge trade at an average 17.2 times estimated earnings for the current year, compared with 15.2 times for the Shanghai Stock Exchange Composite Index. Overseas funds bought a net 6.95 billion rupees ($150.7 million) of Indian equities on June 18, increasing total purchases of the stocks this year to 262.1 billion rupees, according to the nation’s market regulator. Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline. To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net.

Source