Bharti, Sterlite Lead Slide as Indian Sensitive Index Drops for Fourth Day.

India’s stocks fell for a fourth day on concern the central bank may tighten monetary policy to control inflation and that the European debt crisis may slow the global economic recovery.
Bharti Airtel Ltd., the nation’s largest mobile-phone operator, declined 1.5 percent. Sterlite Industries (India) Ltd., the biggest copper and zinc producer, dropped for the fourth day. Rising consumer prices make India’s stock market riskier than China’s, said Garry Evans, HSBC Holdings Plc’s global head of equity strategy.
“The India growth story is strong but we cannot remain isolated from what is happening around us,” said Avinash Gupta, an analyst at Bonanza Portfolio Ltd., a New Delhi-based brokerage. “The central bank has a dilemma of how to balance growth and inflation.” He advises avoiding stocks favored by foreign funds as global investors are likely to sell riskier assets, which he declined to name.
The ay Stock Exchange’s Sensitive Index, or Sensex, lost 100.43, or 0.6 percent, to 16,987.53. The gauge has declined 3.3 percent this week, putting it on course for its worst weekly performance in more than three months. The S&P CNX Nifty Index on the National Stock Exchange fell 0.7 percent to 5,090.85. The BSE 200 Index retreated 0.5 percent to 2,165.74.

Inflation:
Bharti declined 1.5 percent to 291.95 rupees. Reliance Industries Ltd., India’s most valuable company, lost 1.3 percent to 1,007.85 rupees. Housing Development Finance Corp., the biggest mortgage lender, lost 1.7 percent to 2,752.8 rupees.
India will increase interest rates by 150 basis points in the next 12 months to contain rising prices fueled by accelerating economic growth, HSBC forecasts. The nation’s consumer prices surged 14.9 percent in February, while China’s gained 2.7 percent, according to data compiled by Bloomberg.
The MSCI World Index erased its 2010 gain yesterday as European Central Bank council member Axel Weber warned that Greece’s fiscal crisis may have “grave contagion effects” in the euro area.
HSBC is “neutral” on China and “underweight” India, which means the MSCI China index will perform “approximately in line” with the MSCI Asia Pacific Index over the same period, while the MSCI India measure will underperform the regional gauge, he said.
Sterlite retreated 1.3 percent to 740.2 rupees, taking its slide this week to 11 percent. Copper may decline for a third day in London trading after yesterday touching its lowest intraday price since Feb. 10.
Overseas investors bought a net 1.05 billion rupees ($23.5 million) of Indian equities on May 4, taking their total purchases of stocks this year to 304.1 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years earlier in domestic currency terms, as the biggest rally in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.

The following were among the most active on the exchange:
Indian Oil Corp. (IOCL IN) gained 2.7 percent to 307.3 rupees. Shares of state-owned oil refiners rose after the government said they would get additional compensation to help make up part of the revenue lost on selling fuels below cost. Bharat Petroleum Corp. (BPCL IN) rose 2.4 percent to 539.3 rupees and Hindustan Petroleum Corp. (HPCL IN) added 1.2 percent to 332.85 rupees.
The government agreed to give the state-owned refiners 140 billion rupees, Oil Minister Murli Deora said in a telephone interview yesterday. That’s in addition to the 120 billion rupees of compensation already given, he said.
Ranbaxy Laboratories Ltd. (RBXY IN) rose 3.3 percent to 461 rupees. The pharmaceutical company said it entered into a license and settlement agreement with Medicis Pharmaceutical Corp. related to Solodyn extended release tablets. The pact ends legal disputes between the companies, according to a regulatory filing.
Shivalik Bimetal Controls Ltd. (SBC IN) surged 10 percent to 33.05 rupees. The New Delhi-based metal products manufacturer advanced by the daily limit after its fourth-quarter profit rose about 15 fold to 17.7 million rupees.