Aug. 6 (Bloomberg) -- India's benchmark stock index fell the most in a month after commodities prices declined in Asia and on concern that a share sale will draw liquidity away from existing equities.
Sterlite Industries (India) Ltd., the nation's biggest copper producer, lost the most in more than a week as the metal's prices dropped in Asia, snapping a five-day rally. Hindalco Industries Ltd., the country's biggest aluminum producer, posted its biggest decline in a month.
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 389.80, or 2.5 percent, to 15,514.03. Twenty-eight of the 30 companies in the measure sank amid concern the government's plan to sell 60 billion rupees ($1.3 billion) of shares in NHPC Ltd., India's biggest hydroelectric power generator, will draw funds from other companies' equities.
"A lot of liquidity is getting out because of this major IPO," said Suraj Saraogi, managing director Keynote Capitals Ltd. in Mumbai. "We estimate close to 500 billion rupees may get blocked due to the IPO for the next 15 days."
NHPC's share offer opens tomorrow, and the money that buyers hand over when they apply for stock in an initial public offering is unavailable for trading until the share sale process is completed.
The S&P CNX Nifty Index on the National Stock Exchange lost 2.3 percent to 4,585.50. The BSE 200 Index decreased 2.3 percent to 1,893.10.
Sterlite lost 4.8 percent to 647.95 rupees after the metal fell amid concerns China's central bank will rein in lending. Copper for three-month delivery on the London Metal Exchange fell as much as 3.1 percent. Hindalco retreated 6.6 percent to 103.5 rupees. Tata Steel Ltd., the biggest producer of the alloy, lost 4 percent to 454.4 rupees
Maruti Suzuki India Ltd., the maker of half the cars sold in India, lost 5.3 percent to 1,364.7 rupees. Jaiprakash Associates Ltd., the biggest maker of dams, sank 5.5 percent to 230.95 rupees. Tata Motors Ltd., India's biggest truckmaker and owner of Jaguar Land Rover Ltd., slid 7 percent to 418.4 rupees.
Overseas investors bought a net 4.76 billion rupees of Indian stocks on Aug. 3, the Securities & Exchange Board of India said on its Web site. The funds have bought 366.3 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.
The following stocks were among the most active on the exchange:
DLF Ltd. (DLFU IN) fell 3 percent to 379.8 rupees. India's biggest property developer is planning to sell its stake in a local life insurance venture with Prudential Financial Inc., the Economic Times reported, citing two unidentified people familiar with the development.
DLF is looking for a buyer for its 74 percent stake in DLF Pramerica Life Insurance Co., the newspaper reported. The report was incorrect, DLF spokesman Sanjey Roy said in a telephone interview.
Hindustan Unilever Ltd. (HUVR IN) declined 4.1 percent to 278.65 rupees. India's biggest household products maker was downgraded to "neutral" from "overweight" at HSBC Plc. The price target is 320 rupees per share.
ITC Ltd. (ITC IN) slid 4 percent to 234.1 rupees. India's biggest cigarette maker was downgraded to "neutral" from "overweight" at HSBC Plc. The price target is 264.00 rupees per share.
National Aluminium Co Ltd. (NACL IN) fell 2 percent to 319.05 rupees. The nation's second-largest producer of the metal said output is likely to be affected in August after a 9 percent fall in July.
To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at email@example.com