Sensex snaps 2-day winning streak, falls 111 points

India stocks declined for the first time in three days, led by Reliance Industries after a government official’s comments increased concern that the economic slowdown will be prolonged.

Reliance Industries, the nation’s most valuable company, fell 1.4 per cent, and Housing Development Finance Corp., the biggest mortgage provider, lost 3.5 per cent.

Stimulus plans will need to extend into the financial year starting April 1 and spending will be increased on projects, Montek Singh Ahluwalia, deputy chairman of the India’s Planning Commission, said yesterday. Steel makers gained on the expectation demand for metal may rebound as customers use up inventories.

“Concerns about the effectiveness of steps being taken by the government to revive demand continue to weigh on the market,” said R K Gupta, who manages the equivalent of about $100 million of stocks at Taurus Mutual Fund in New Delhi. “Massive job cuts and falling tax collections point to a prolonged slowdown.”

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 110.97, or 1.2 per cent, to 9,090.88 at the 3:30 pm close of trading. The S&P CNX Nifty Index on the National Stock Exchange declined 23, or 0.8 per cent, to 2,780.05. The BSE 200 Index lost 9.56, or 0.9 per cent, to 1,068.83.

Reliance Industries fell 1.4 per cent to 1,288.80. Housing Development shed 3.5 per cent to 1,387.90.

Steel makers climb
Tata Steel, the country’s biggest producer of the alloy, and JSW Steel, the third-biggest, climbed on expectation that demand for the metal may rebound. ArcelorMittal, the world’s largest steel maker, said yesterday consumption may rebound by the end of the first quarter as customers use up inventories.

Tata Steel gained 1.3 per cent to Rs 181.80, JSW added 2 per cent to Rs 195.35 and Sesa Goa, the biggest private exporter of iron ore, climbed 4.5 per cent to Rs 91.05.

“People are anticipating that trade will improve as iron ore imports by China have gone up,” said Bharath S, an analyst at Sundaram BNP Paribas Mutual Fund in Chennai.

Shippers advanced after rates to transport commodities had their biggest gain since at least 1985 on increased Chinese demand. The Baltic Dry Index, a measure of shipping costs for commodities, rose 15 per cent in London yesterday as the number of idled capesizes fell to almost zero, indicating strengthening iron ore demand.

Shipping Corp. of India, the nation’s biggest carrier, rose 0.3 per cent to 83.15 and Great Eastern Shipping Co advanced 6.8 per cent to 189.75.

Overseas funds sold a net Rs 161 crore ($33 million) of Indian stocks February 3, according to the nation’s stock market regulator.