A stock broker looks at a Bombay Stock Exchange trading terminal in Mumbai. The  Sensex lost 1% to 25,616.84 points yesterday, the lowest close since September 11.

Bloomberg
Mumbai


Indian equities slid to a two-week low as a decline in European shares renewed global growth concerns before the central bank’s policy review today.
Tata Motors, the owner of Jaguar Land Rover, plunged to a two-year low. Vedanta, the largest copper producer, extended this year’s loss to 58% and Tata Steel slid to a one-month low. Coal India, the world’s top miner of the fuel, slumped to its lowest level since May 2014. Infosys, the second-largest software maker, halted six days of advance.
The S&P BSE Sensex lost 1% to 25,616.84, the lowest close since September 11, with bulk of the losses coming in the final hour of trade. The gauge fell 1.4% last week, after two weeks of gains, as investors mulled whether the Reserve Bank of India will cut interest rates for a fourth time this year to bolster economic growth.
“I’d expect the governor to hold rates, but he’s under tremendous pressure, going by all the noise around him by industrialists and politicians,” Anil Ahuja, Singapore-based chief executive officer of IPEplus Advisors, said in an interview with Bloomberg TV India. “If I was to look at the pure data, I’d expect him to hold the rate and wait for more information before reducing.”
Thirty seven of 45 economists in a Bloomberg News survey predict a quarter-point cut by the Reserve Bank of India today, with seven forecasting no change and one anticipating a 50 basis-point reduction.
RBI Governor Raghuram Rajan left the main rate unchanged at 7.25% in August after three cuts in 2015 to meet his inflation target of 6% by January. While price pressures have eased sharply as oil slumped below $50 a barrel, household expectations of where inflation will be in a year hit more than 10% in June from as low as 8.9%in December, according to a central bank survey published August 4.
Losses in the Sensex deepened after European equity declined as global growth concerns resurfaced after Chinese industrial companies reported profits fell the most in at least four years. The Stoxx Europe 600 Index fell 1.1% in London. Tata Motors plunged 6.1% to its lowest level since August 2013. Coal India decreased 3%, extending this year’s loss to 20%. Infosys tumbled 2.8%, ending a six-day rally.
Sun Pharmaceutical Industries, the nation’s largest drugmaker, decreased 3.5%, the most since August 24. Group company Sun Pharma Advanced Research said Friday the US FDA had rescinded approval for Elepsia XR over quality concerns at its Halol plant. Sun Pharma Advanced slid 2.9%.
Dr Reddy’s Laboratories surged 5.6%, the most since September 2009. Lupin added 2.1%. Hindustan Unilever increased 1.2%, ending five days of declines. International investors sold a net $195mn of Indian stocks on September 23, paring this year’s inflows to $3.9bn. The Sensex has fallen 6.9% this year and trades at 14.7 times projected 12-month earnings, according to data compiled by Bloomberg. The MSCI Emerging Markets Index is valued at a multiple of 10.5.
The market was closed on Friday for a public holiday.
Meanwhile the rupee rose 0.2% to 66.0475 a dollar, prices from local banks compiled by Bloomberg show.
The Reserve Bank of India will reduce the repurchase rate to 7% from 7.25%, according to 42 of 52 economists surveyed by Bloomberg.
“All eyes are on the central bank and its commentary about the path for monetary easing ahead,” said Soumyajit Niyogi, an interest-rate strategist at SBI DFHI in Mumbai. “Apart from a cut in the repo rate, the bond market is also expecting an increase in foreign investment limits.”
Ten-day historical volatility for notes due May 2025 rose to 2.28% on Monday, the highest since September 18. The yield on the debt rose one basis point to 7.73% in Mumbai, the highest level since September 16, according to prices from the central bank’s trading system. Global funds have almost exhausted their $30bn limit for investment in local sovereign bonds, data from the National Securities Depository show. India is “committed to a steady expansion in the absolute value of foreign institutional investor participation,” Governor Rajan said in July.
Consumer-price inflation, the RBI’s benchmark, eased to 3.66% in August from a revised 3.69% in July.