Bloomberg/Mumbai
Indian stocks plunged the most in Asia as investors weighed whether the US Federal Reserve will extend measures to boost the world’s biggest economy.The Indian rupee meanwhile completed a fourth weekly loss on speculation slowing economic growth and inflation that has held above 9% this year will deter investors.“Inflation continues to prevail at higher levels and growth is also softening,” said Naveen Raghuvanshi, a currency trader in Mumbai at Development Credit Bank Ltd “This has led to capital outflows as investors aren’t happy.”The rupee dropped 0.9% this week to 46.16 per dollar at yesterday’s close in Mumbai, according to data compiled by Bloomberg. It fell 0.2% yesterday. The rupee’s 4.2% loss this month is the worst performance among Asia’s 10 most- traded currencies.The Bombay Stock Exchange Sensitive Index, or Sensex, lost 297.50, or 1.8%, to 15,848.83 at the close in Mumbai. The measure had its fifth week of losses, the longest run since October 2008, when the collapse of Lehman Brothers Holdings Inc froze global credit markets.“Investors are nervous ahead of the important statement from the Fed,” said Kaushik Dani, a Mumbai-based fund manager at Peerless Mutual Fund, which manages $1.1bn in assets. “Cash is king at such times.”The S&P CNX Nifty Index on the National Stock Exchange fell 1.9% to 4,747.80, the lowest level since Feb. 5, 2010, and its September futures settled at 4747.60. The BSE 200 index retreated 2.1% to 1,964.28.Reliance Industries Ltd, owner of the world’s largest refinery complex, plunged the most in 22 months. DLF Ltd, the nation’s biggest developer, retreated and Tata Power, the largest generator outside state control, plunged to a 27-month low after its rating was cut at Morgan Stanley.Reliance plunged 4.5% to Rs719.40, the most since November 2009. The company will probably miss a target of drilling 11 wells at the nation’s biggest natural gas deposit by March 31, a source said.Reliance has plunged 32% so far this year, losing its position as India’s most valuable company, as gas output from the block off the east coast declined.DLF tumbled 5.9% to Rs176.10 and its September futures settled at Rs174. Jaiprakash Associates Ltd, a projects developer, lost 7.7% to Rs54.75. The stock has plunged 48% this year and is the worst performer on the 30-member Sensex.Tata Power slid 3.1% to Rs1,013.15. The stock was cut to “underweight” from “equal-weight” by Parag Gupta and Satyam Thakur, analysts at Morgan Stanley. The brokerage cut the target price on the stock by 26% to 900 rupees saying high coal cost will hurt profit margin.Coal India Ltd, said the world’s largest producer of the fuel, decreased 4.1% to Rs359.40. It’s the worst performer on the Sensex this week.Reliance Communications Ltd, the second-largest operator of cell phones, plunged 11% to Rs72.20, the lowest price since its debut in March 2006. Reliance Capital Ltd sank 12% to 344.20, its lowest level since March 2009.The Federal Reserve’s decision to keep record-low interest rates and the possibility of further steps to stimulate the US economy may stoke commodity prices and fan inflation in India, the Asian nation’s central bank said.India’s central bank expects the country’s growth to slow to 8% in the year to March 31, from an estimated 8.5% in the previous 12 months. The economy has grown at an average pace of 8.6% since 2006, compared with China’s 9.8% during the period, data compiled by Bloomberg show.Earnings for 47% of Sensex companies missed analyst estimates in the June quarter, according to Bloomberg data. That compares with 33% that lagged behind forecasts in the previous three months.The Sensex has fallen 25% from the November 5 high, exceeding the 20% level that marks a so-called bear market for some investors. Companies on the measure trade at 13.2 times estimated earnings, down from 21.5 times last March. The MSCI Emerging Markets Index trades at 9.7 multiple.