BLBG:Indian Stocks Drop To Year’s Low As Rupee Falls To Record
India’s benchmark stock index fell to near its lowest level this year as the rupee’s decline to a record renewed concern the government will find it difficult to control inflation and the fiscal deficit.
Bharti Airtel Ltd. (BHARTI), the nation’s largest mobile-phone operator, slumped to its lowest level in about two years. Tata Power Co. (TPWR), the largest private utility, tumbled to its lowest price since January after unexpectedly reporting a loss. The rupee touched an all-time low of 56.1875 per dollar.
The BSE India Sensitive Index (SENSEX), or Sensex, retreated 0.6 percent to 15,928.77, according to preliminary closing prices at 3:30 p.m. in Mumbai, its lowest close since Jan. 9. The gauge has lost 14 percent from its Feb. 21 high, exceeding the 10 percent slump that signifies a correction to some investors.
“Currency is the biggest issue,” Ambareesh Baliga, chief operating officer at Way2Wealth Brokers Pvt. in Mumbai, told Bloomberg UTV today. “This could lead to inflation which is not demand led, but currency-led. If the fiscal deficit slips further we could possibly see the rupee at 58 to 60 a dollar and calculations will go haywire.”
Concern India’s outlook has worsened because of trade and fiscal deficits, policy gridlock, elevated consumer prices and faltering global growth has made the rupee the worst-performing Asian currency this quarter. Prime Minister Manmohan Singh said yesterday the government needs to take “difficult” steps to curb spending and boost revenue as his Congress party and its allies marked the third anniversary of their government.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
