Indian stocks dropped the most among major benchmark indexes in Asia as the rupee fell to a record, renewing concern the government may find it difficult to rein in inflation and bridge a shortfall in its finances.
Tata Power Ltd., the country's largest generator outside state control, plunged the most this year. Maruti Suzuki India Ltd., the biggest carmaker, slid the most in about two years.
The rupee touched a record after Fitch Ratings reduced Japan's credit rating, erasing earlier gains.
The BSE India Sensitive Index, or Sensex, lost 1 per cent to 16,026.41, its lowest close since January 9. The gauge has retreated 13 per cent from its February 21 high, exceeding the 10 per cent drop that signals a correction to some investors. The broader 50-share NSE index fell 0.93 per cent to 4,860.50 points.Recent outperformers such as banks were hit hard, with State Bank of India falling 3.5 per cent.
The rupee declined 0.6 per cent to an unprecedented 55.3925 per dollar at in Mumbai, according to data compiled by Bloomberg. It had risen 0.8 per cent intraday.