India’s benchmark stock index fell, completing its steepest weekly slide in four. ICICI Bank Ltd. led lenders lower on concern they may have to raise more equity. ICICI Bank, the nation’s second-largest lender, lost 2 percent after the Basel Committee on Banking Supervision said banks should increase the quality of the capital they hold by the end of 2012 to cope with losses. State Bank of India, the biggest lender, fell 1 percent. Wipro Ltd., India’s third- largest software-services provider, gained 0.5 percent after entering an agreement with Telefonica O2 Germany.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, retreated 174.42, or 1 percent, to 16,719.83. The gauge has fallen 2.3 percent this week, its biggest such loss since the five days ended Nov. 29. The S&P CNX Nifty Index on the National Stock Exchange dropped 1.1 percent to 4,987.70. The BSE 200 Index fell 0.8 percent to 2,097.18
“Investors are cautious about valuations and are not going overboard,” said Swati Kulkarni, a Mumbai-based fund manager with UTI Asset Management Co., who manages the equivalent of about $850 million of equities. ICICI Bank declined 2 percent to 809.35 rupees. State Bank fell 1 percent to 2,145.35 rupees. HDFC Bank Ltd., the No. 3, slid 0.4 percent to 1,664.1 rupees. Housing Development Finance Corp., India’s biggest mortgage lender, lost 1.2 percent to 2,575.35 rupees.
‘Not as Cheap’
Wipro gained 0.5 percent to 674.7 rupees. The company said it entered an “out-tasking” testing services agreement with Telefonica. Tata Motors Ltd. added 3.1 percent to 733.95 rupees after the owner of Jaguar Land Rover said group sales in November rose 62 percent from a year earlier.
Indian stocks may fall as much as 30 percent after the benchmark index more than doubled from the year’s low in March, investor Marc Faber said yesterday.
“Valuations are not as cheap as they used to be; a 20 to 30 percent correction won’t be unusual,” Faber, publisher of the Gloom, Boom & Doom Report, said late yesterday. He didn’t specify a time frame for the decline.
Maruti Suzuki India Ltd., the nation’s biggest carmaker, fell 0.4 percent to 1,548.8 rupees, retreating for a second day after being rated “sell” in new coverage at Goldman Sachs Group Inc., which cited “expensive” valuations, the company’s increasing reliance on exports and more competition. The stock has risen almost threefold this year.
KRBL Ltd., an Indian food processor, climbed 3.1 percent to 201.1 rupees, its highest level in more than 3 1/2 years, after its board agreed to split each share with a face value of 10 rupees into 10 new ones worth 1 rupee each. Splitting the stock may make it easier to trade by reducing the unit price.