Bloomberg News

Indian Stocks Decline on Growth Concern Ahead of ECB Meeting

September 05, 2012

Indian stocks retreated, tracking Asian equities, as economic reports from the U.S. to China and Australia stoked concern global growth is slowing.

Bharat Heavy Electricals Ltd. (BHEL), the largest power-equipment maker, tumbled 5.3 percent. Larsen & Toubro Ltd. (LT) slumped 3.2 percent. A report showed yesterday U.S. manufacturing fell for a third straight month in August, marking the longest decline since the recession ended in 2009. ICICI Bank Ltd. (ICICIBC), the biggest non-state lender, dropped 3.6 percent.

The BSE India Sensitive Index (SENSEX), or Sensex, fell 0.8 percent to 17,301.23, according to preliminary closing prices at 3:30 p.m. in Mumbai. China’s factory-output growth may slow to about 10 percent, from 13.9 percent in 2011 and 15.7 percent in 2010, Securities Times reported, citing a joint report by the Ministry of Industry and Information Technology and the Chinese Academy of Social Sciences. Data showed today Australia’s economy slowed more in the second quarter than economists expected.

The MSCI Asia Pacific Index (MXAP) lost 1.3 percent, heading for the lowest close since July. Volatility across the region rose as investors awaited developments out of Europe. Mario Draghi, president of the European Central Bank, said the bank’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival. His comments came before the ECB’s Governing Council is due to decide on his bond-buying proposal tomorrow.

The European Union is India’s largest trading partner. It accounted for 17.2 percent of the nation’s exports in the six months ended September 2011, according to the commerce ministry.

To contact the reporter on this story: Shikhar Balwani in Mumbai at sbalwani@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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