Bloomberg/Mumbai

An Indian policeman walks past a collage of the Indian rupee symbol made with signs of the US dollar, the yen, the pound and the euro outside the Mumbai Stock Exchange in Mumbai (file). The BSE India Sensitive Index slid 0.6% to 16,218.53 yesterday. The rupee declined 6% this month to 56.11 per dollar in Mumbai. That is the worst performance among the 11 most-traded Asian currencies tracked by Bloomberg
Indian stocks declined yesterday, with the benchmark index completing its worst May performance since 2006, as a government report showed the economy grew at the slowest pace in nine years.
ICICI Bank Ltd, the nation’s biggest private lender, and Tata Motors Ltd, which owns Jaguar Land Rover, sank to their lowest price in four months.
Asia’s third-largest economy grew 5.3% in the March quarter, compared with a median 6.1% of 31 estimates in a Bloomberg survey.
The BSE India Sensitive Index, or Sensex, slid 0.6% to 16,218.53 at the close, its lowest level since May 25. The gauge lost 6.4% this month, the biggest decline since a 14% slump in May 2006.
Discord in the ruling coalition and claims of graft have caused policy gridlock, impeding Prime Minister Manmohan Singh’s push to open up the economy. Investments fell to 34.4% of gross domestic product last fiscal year from 38.1% in 2007-2008, according to Morgan Stanley.
“There’s policy paralysis in the government,” said Anil Singhvi, chairman at Ican Investment Advisors Pvt, by phone from Mumbai. “Unless day-to-day action is taken, we will reach a level of despondency. We are close to a meltdown.”
While growth has slowed in countries from Brazil to China amid Europe’s debt crisis, India’s record trade deficit, the widest budget gap and the fastest inflation among the so-called BRIC nations and policy reversals have contributed to the 12% decline in the Sensex from its February 21 high.
The rupee fell to a record low in May, completing the worst month since November, and government bonds rallied the most in more than three weeks as data showed the economy grew at the slowest pace in nine years.
The rupee declined 6% this month to 56.11 per dollar in Mumbai, according to data compiled by Bloomberg. That is the worst performance among the 11 most-traded Asian currencies tracked by Bloomberg. The rupee rose 0.2% yesterday, after sliding to an all-time low of 56.5150 earlier.
“It is a very disappointing number,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd “Forward indicators are not good with the situation in the eurozone being dire. The rupee may find the rug being pulled from beneath its feet considering the risk-off climate and India’s report card not being so good.”
The rupee has weakened 9% this quarter, the worst performance in Asia.