Most Indian stocks decline ahead of wholesale inflation data - Livemint

Global investors bought a net $38.7 million of domestic shares on 12 December, taking this year's inflows to $18.7 billion, the most in Asia after Japan, data from the regulator show. Photo: Hemant Mishra/Mint.

Mumbai: Most Indian stocks dropped before the release of wholesale-price inflation data.

HDFC Bank Ltd, India's biggest lender by value, declined the most in three weeks. Tata Motors Ltd, the owner of Jaguar Land Rover, slid for the fourth day in five. Glaxosmithkline Pharmaceuticals Ltd jumped 20% to a record after its parent offered to increase its stake.

Three stocks fell for every two that advanced on the BSE Sensex, which lost less than 0.1% to 20,714.05 at 9:32am in Mumbai. The gauge retreated the most in a month last week after data showed consumer-price inflation exceeded estimates. Most economists in a Bloomberg survey expect Reserve Bank of India (RBI) governor Raghuram Rajan to increase the benchmark interest rate to 8% from 7.75% in a decision due 18 December. Wholesale price index (WPI)-based inflation probably held unchanged at 7% from the month before, according to the median of analysts surveyed by Bloomberg.

"All eyes are on the wholesale price inflation as that may determine whether the central bank will raise its borrowing costs or maintain the status quo," Kishor Ostwal, managing director at CNI Research Ltd, said by phone. "Till then, we expect the market to be in a wait-and-watch mode."

Consumer prices rose 11.24% in November from a year earlier, data on 12 December showed, compared with the 10% gain analysts had predicted.

Rajan has raised interest rates twice since he moved to the central bank in September to fight rising prices.

'We are very uncomfortable with the current level of inflation," Rajan told reporters in Kolkata on 12 December. "We are aware of the weak economy, but we also have to take into account inflationary pressures."

Global investors bought a net $38.7 million of domestic shares on 12 December, taking this year's inflows to $18.7 billion, the most in Asia after Japan, data from the regulator show.

The Sensex has climbed 6.5% this year, the best performer among the four largest emerging markets, and trades at 13.5 times projected 12-month earnings, compared with the MSCI Emerging Markets Index's 10.1 times. Bloomberg

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