Sensex tumbles to 14-month low

Indian equities tumbled to the lowest in 14 months after the loss of America's top credit rating fuelled concern global economic growth will falter. Reliance Industries, India's most valuable company, sank to its lowest price since March 2009. Hindalco Industries Ltd., the aluminium maker that controls U.S.-based Novelis Inc., fell the most since January. Infosys Ltd., the second-largest software exporter, paced a decline among its peers. The Bombay Stock Exchange Sensitive Index, or Sensex, lost 1.8 per cent to 16,990.18, its lowest level since June 10, 2010. The measure slumped 3.2 percent intraday, capping a 20 per cent drop from a November peak. A loss of 20 per cent or more signals a so-called bear market to some investors. The gauge trades at 13.8 times estimates earnings, the lowest since May 2009, and down from 21.5 times in March 2010, last year's high. Article continues below "Risk-aversion among global investors will reduce flows to India in the near term, but India's relative attractiveness improves," said Aneesh Srivastava, who oversees $465 million as chief investment officer at IDBI Federal Life Insurance Co. in Mumbai. "We're using the drop to add to our holdings." Srivastava said he's "positive" on banks, engineering and construction companies. The S&P CNX Nifty Index dropped 1.8 per cent to 5,118.50. The BSE-200 Index lost 1.7 per cent to 2,118.23. Standard & Poor's cut the U.S. long-term rating one level to AA+ on August 5. It kept the outlook at ‘negative'.