Mumbai: India's benchmark stock index declined after inflation accelerated at the fastest pace in 15 months, putting pressure on the government to withdraw its fiscal and monetary stimulus.
State Bank of India slid 1.2 per cent. An index of wholesale prices climbed 8.56 per cent in January from a year earlier, after a 7.31 per cent gain the prior month, the commerce ministry said Monday in New Delhi.
Bharti Airtel Ltd, India's largest mobile-phone operator, tumbled the most in more than four months after offering to buy African assets from Kuwait's Zain.
"Inflation is a concern," said Bhavesh Kanani, an analyst at Sharekhan Ltd. in Mumbai. "Borrowing costs will go up and that may hurt earnings of companies."
He predicts the Reserve Bank of India will raise interest rates by April.
The Bombay Stock Exchange's Sensitive Index, or Sensex, lost 114.24, or 0.7 per cent, to 16,038.35. India's stock markets were closed February 12 for a public holiday.
The S&P CNX Nifty Index on the National Stock Exchange declined 0.5 per cent to 4,801.95. The BSE 200 Index retreated 0.6 per cent to 2,036.15.
State Bank of India, the biggest lender, slipped 1.2 per cent to Rs1,895. ICICI Bank Ltd., the second largest, fell 1.1 per cent to Rs817.35.
Finance Minister Pranab Mukherjee is under pressure from the central bank to raise taxes in the February 26 budget after Governor Duvvuri Subbarao increased lenders' reserve requirements last month to cool prices.
