[R]10:00AM New York, 7:30 PM Mumbai – Ahead of last phase of parliament elections, stocks in Mumbai declined. Commodities prices fell. Wholesale price index increased at 0.7% as measured inflation hovers near three-decade low.[/R]

The benchmark index in Mumbai trading fell 2% in volatile trading as investors focused the parliamentary elections. Commodities prices fell and dragged metals and mining companies stocks lower.

The fifth phase of 15th Lok Sabha election will take place on May 13 and results will be released on May 16.

The latest measure of annualized wholesale price index for the 52 weeks ending April 25 increased at 0.7%, a rise from the previous week measure of 0.57%.

In Mumbai, the BSE 30-share Sensex Index fell 2% or 240.51 to 11,876.43, and the CNX Nifty shed 1.7% or 63.20 to 3,620.70.

Trading Statistics

Of the stocks traded on the BSE, 1,277 rose, 1,287 dropped, and 53 shares were unchanged.

Daily turnover on the BSE increased to 6,612 crore rupees from 4,704.45 crore rupees yesterday.

Forex Reserves Fall to $251.7 billion

Reserve Bank of India said today in its weekly statistical supplement the country’s foreign exchange reserves dropped to $251.7 billion as of May 1 from $253.1 billion a week earlier.

India Can Grow at 7-8%, Former Governor

Reuters News reported today that former governor of the Reserve Bank of India Yaga Venugopal Reddy said the country can grow between 7% and 8%, but growth beyond 9% will “stretch its infrastructure.”

He noted that India will emerge faster from the recession than developed economies.

Reddy said, “Infrastructure as a simple bottleneck does impose some limits to the extent to which you can boost growth entirely through fiscal stimulus without any effect on the inflation side.”

The former governor said the chronic high fiscal deficit reduces “the scope for further reforms in the financial sector and also make it difficult for India to go on a higher growth path.”

Gainers & Losers

Reliance Industries declined 0.9% to 1,897 rupees.

Larsen & Toubro edged up 0.5% to 992 rupees.

Auto stocks fell. Tata Motors dipped 1.4% to 268.40 rupees, Maruti Suzuki India shed 1.1% to 830.05 rupees, and Mahindra & Mahindra declined 4.3% to 494.25 rupees.

Unconfirmed reports suggest that Tata Motors Ltd is working to raise 5,000 crore rupees to repay its $2 billion loan to acquire UK based Jaguar Land Rover from Ford Motor.