India’s benchmark stock index fell to its lowest level in more than two months. DLF Ltd. led a decline in property stocks after Ambit Capital Pvt. said the companies may face higher borrowing costs.
DLF lost 3.8 percent to 292.5 rupees, while New Delhi-based builder Unitech Ltd. dropped 6.2 percent to 62.95 rupees, its lowest close since May last year.
“Debt restructuring and refinancing would go through increased scrutiny and the required asset security will go up,” Parikshit Kandpal, a Mumbai-based analyst at Ambit Capital, wrote in a note to clients. Loans will be delayed, pushing builders to postpone the development of their land, which in turn increases debt-to-equity levels, he added.
Larsen & Toubro Ltd., the nation’s biggest engineering company, plummeted 4.1 percent to 1,934.15 rupees, while Jaiprakash Associates Ltd., a builder of dams, roads and bridges, sank 5.5 percent to 114.5 rupees, its biggest decline since July 26.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost 141.69, or 0.7 percent, to 19,318.16 as of the 3:30 p.m. close in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange retreated 1.1 percent to 5,799.75. The BSE 200 Index dropped 1.4 percent to 2,431.62.
The Sensex has slipped 8 percent from a Nov. 5 record close as inflation in China, Europe’s debt crisis, skirmishes between North and South Korea and concern about the strength of U.S. growth roiled investor confidence.
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