Mauritius’s stocks gauge fell the most in almost 500 days

Mauritius’s stocks gauge fell the most in almost 17 months, led by State Bank of Mauritius Ltd., as oil prices advanced for a second day, stoking concern that inflation will erode profit.

The 37-member SEMDEX Index retreated 1.6 percent to 1,946.92 by 1:30 p.m. close in Port Louis, the biggest drop since September 2009. State Bank, the second-largest lender by market value, slumped 3.8 percent to 88.5 rupees, the lowest since December 2009.

Crude for April delivery surged as much as 1.9 percent to $99.86 a barrel as concern that political unrest may cut Middle Eastern exports countered estimates that the earthquake in Japan will curtail fuel demand. Mauritius gasoline prices climbed 5.8 percent in the 10 weeks through March 14, while retail prices advanced 9 percent in the period, State Trading Corp. said. The country’s inflation rate rose to 6.8 percent in February, the highest since November 2008, adding to pressure on the central bank to raise interest rates.

“There’s an element of panic-selling by some local investors who are concerned by increase in fuel prices that will affect profit margins,” Imrith Ramtohul, a senior investment manager at Mauritius Union Assurance Ltd. who helps oversee 6 billion rupees ($208.7 million) in assets, said in a phone interview today. “There’s speculation of a probable increase in the repo rate that will further affect profitability and indirectly the economy.”

The central bank will probably raise its benchmark interest rate, currently at 4.75 percent, when it announces its next decision on March 28, with 22 of 30 analysts in a PluriConseil- l’Express survey expecting an increase, l’Express, a Port Louis- based newspaper, reported yesterday