Bharat Heavy Electricals tumbled the most since May, while Coal India, the largest producer of the fuel, had it's biggest drop since January. State Bank of India, the nation's biggest lender, fell the most in two months. Tata Motors, owner of Jaguar Land Rover, rallied before its quarterly earnings.
The Sensex lost 0.2 per cent to 28,236.39 at the close in Mumbai, after changing directions at least 15 times. The gauge rose 0.4 per cent this week, after overseas investors bought $234 million of stocks through Wednesday.
"We saw some stock-specific actions based on news flow," Vaibhav Sanghavi, managing director at Ambit Investment Advisors in Mumbai, said by phone. 'Local fund flows have been strong, giving support.''
Domestic investors poured Rs 5,840 crore ($915 million) into local funds in July, extending this fiscal year's inflows to Rs 38,100 crore, data from the Association of Mutual Funds of India showed. In the same period last year the inflow was Rs 20,780 crore. Sanghavi said his funds are long on financials and short on commodities. He also likes shares of industrials, consumer discretionary and automakers.
Rate unchanged
Indian equities have received $1.1 billion in foreign inflows since July 1, the only Asian market tracked by Bloomberg to see net purchases during the period. Reserve Bank of India Governor Raghuram Rajan on Tuesday left interest rates unchanged, saying he wants to ensure his inflation target of six per cent by January isn't at risk.
CLSA Asia-Pacific Markets increased India's "already substantial overweight" by two percentage points while cutting
China's, chief equity strategist Christopher Wood wrote in his Greed & Fear report on Friday, citing the government's plan to re-capitalize state-run banks.
Bharat Heavy Electricals reported first quarter net income of Rs 33.9 crore, missing the Rs 210 crore estimated by analysts. Sales at Rs 4,280 crore also missed the estimated Rs 5,280 crore. The shares plunged 5.8 per cent, the most since May 6.
JLR disappoints
Mahindra & Mahindra, India's largest maker of utility vehicles and tractors, decreased 0.5 per cent. The company's first quarter sales missed estimates. Net income fell 3.4 per cent to Rs 852 crore, beating the Rs 740 crore estimated by analysts.
Shares of Tata Motors, which reported earnings after trading hours, rose 2.7 per cent, the most since July 23. Profit missed estimates as demand for Jaguar Land Rover vehicles slumped in China amid a slowdown. Net income halved to Rs 2,770 crore from Rs 5,400 crore a year earlier, trailing the Rs 3,140 crore median of 31 analysts' estimates compiled by Bloomberg.
Profit at the Jaguar Land Rover unit declined to 492 million pounds ($764 million) from 693 million pounds.
Fifteen of the 23 Sensex companies, or 65 per cent, that have posted results for the June quarter have matched or exceeded estimates, versus 40 per cent in the March quarter.
Coal India declined 3.9 per cent, paring this year's gains to eight per cent. State Bank lost 2.7 per cent, the most since June 3.
The Sensex has risen 2.7 per cent and trades at 15.8 times projected 12-month earnings, compared with a multiple of 11.2 for the MSCI Emerging Markets Index.