Bloomberg/Mumbai

A Bharat Heavy plant, whose shares tumbled 5.1% to Rs207.65. Industrials and material-makers were the biggest drag on the Sensex yesterday
Indian stocks yesterday declined the most in a week, tracking losses in Asian equities, as economic reports from the US to China and Australia stoked concern global growth is slowing.
Bharat Heavy Electricals Ltd, the largest power-equipment maker, sank 5.1%. Larsen & Toubro lost 3%. A report showed yesterday US manufacturing fell for the third month in August, marking the longest slide since the recession ended in 2009. ICICI Bank, the biggest private lender, dropped 3.6%.
The BSE India Sensitive Index, or Sensex, slid 0.7% to 17,313.34 at close, the lowest level in a month. The MSCI Asia Pacific Index fell 1.3% to the lowest level since July 26.
China’s industrial-output growth may slow to about 10%, from 13.9% in 2011 and 15.7% in 2010, the Securities Times reported, citing a joint report by the Ministry of Industry and Information Technology and the Chinese Academy of Social Sciences.
“Global growth concerns are intact and they are weighing on the markets,” said Jitendra Panda, head of sales at Mumbai-based Future Capital Holdings. “Investors are cautious as they await cues from the ECB meeting.”
Volatility across the Asian region increased as investors awaited developments out of Europe.
The Sensex fell 2% last week, its first weekly drop in five and the most since the week ended May 11. The gauge has risen 12% this year, helped by the highest foreign flows among 10 Asian markets excluding China tracked by Bloomberg.
Overseas funds bought a net $54.5mn of stocks on Sept 4, taking their investment into Indian equities this year to $12.3bn, data from the market regulator show.
The Sensex is valued at 13.8 times estimated earnings, compared with a multiple of 10.6 times for the MSCI Emerging Markets Index, which has risen 2.3% in 2012.
Shares of industrials and material-makers were the biggest drag on the Sensex yesterday. Bharat Heavy tumbled 5.1% to Rs207.65 and construction company Larsen & Toubro lost 3% to Rs1,324.30, the most since. JP Morgan Chase & Co earlier this week downgraded the two stocks to underweight.
Jindal Steel & Power Ltd, India’s third-largest producer by market value, sank 4.9% to Rs335.80. Tata Steel slid 3.8% to Rs349.90.
Sterlite Industries (India), the top copper producer, lost 3.2% to Rs93.15, its lowest close since June 5. Copper prices fell for a second day in London as weaker growth in Australia’s economy added to concern about a global slowdown and the outlook for metals demand.
ICICI Bank slumped 3.6% to Rs879.65. Larger rival State Bank of India declined 2.4% to Rs1,830.25.
India VIX, which measures the cost of protection against losses in the S&P CNX Nifty Index, jumped 2.5% to 17.01. The Nifty lost 0.9% to 5,225.70 while its September futures traded at 5,252. The BSE-200 Index fell 0.8% to 2,110.87. The top two bourses traded 815mn shares on Tuesday, compared with a 12-month daily average of 887mn shares.
The Indian rupee meanwhile fell yesterday to the lowest level in almost three weeks as investors sought the perceived safety of the dollar on concern global growth is slowing.
The rupee declined 0.5% to 55.9125 per dollar in Mumbai, the biggest drop since August 14, according to data compiled by Bloomberg. It touched 55.9600 earlier, the weakest level since August 16. One-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 9.5%.
Three-month onshore rupee forwards traded at 56.85 per dollar, compared with 56.64 yesterday, and offshore non- deliverable contracts were at 56.86 from 56.55. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.