Sensex posts biggest monthly drop since August

The S&P BSE Sensex rose less than 0.1 per cent to 26,145.67 at the close, after changing direction at least 20 times

Stocks fluctuated, as software exporters and automobile stocks advanced before the central bank's policy review Tuesday, countering losses in energy and telecom companies.

Infosys, the second-largest software exporter, climbed to a two-week high. Mahindra & Mahindra, a tractor producer, was the best performer on an index of automakers, which rallied to a three-month high. Coal India, the world's largest miner of the fuel, and Sun Pharmaceutical Industries, India's most valuable drugmaker, fell more than one per cent each.

The S&P BSE Sensex rose less than 0.1 per cent to 26,145.67 at the close, after changing direction at least 20 times. The gauge posted a second weekly gain on Friday amid optimism the government will be successful in pushing through the parliament a bill for a nationwide sales tax, a proposal that's been repeatedly blocked by opposition parties. Asian stocks fell one per cent, while the Shanghai Composite Index added 0.3 per cent at the close after slumping as much 3.2 per cent.

"The momentum is positive on optimism about the goods-and- services tax bill, but weak Asian markets are not giving confidence," Alex Mathews, the head of research at Geojit BNP Paribas Financial Services, said by phone from the southern state of Kerala. "Automakers are rallying as they are likely to report good sales numbers for the festive season."

RBI decision

Reserve Bank of India Governor Raghuram Rajan will leave the repurchase rate unchanged after paring it 125 basis points in 2015, according to a Bloomberg survey of economists. A report Monday will probably show Asia's third-largest economy expanded 7.3 per cent last quarter, according to a Bloomberg survey.

Infosys climbed two per cent in a third day of gains. Mahindra & Mahindra rose 1.1 per cent, taking this month's rise to 15 per cent, the second-best performance on the Sensex. Tata Motors, owner of Jaguar Land Rover, extended last week's 3.7 per cent advance. The stock has soared 42 per cent since October 1.

Bajaj Auto, a motorcycle maker, rose 1.3 per cent, the most since November 23. Automakers will report November sales data on Tuesday.

Coal India fell 1.8 per cent to its lowest level since November 11. Sun Pharmaceutical and rival Lupin lost 1.4 per cent.

Bharti Airtel, India's largest mobile-phone operator, tumbled the most since November 5 and was the worst performer on the Sensex. India's top wireless carrier plans Rs 60,000 crore ($9 billion) investment to improve voice and data quality, Chief Executive Officer Gopal Vittal said in a statement on Monday.

The Sensex retreated 1.9 per cent this month, the most since August, as foreigners pulled$793 million, the biggest monthly withdrawal since September. The index is down 4.9 per cent for the year and trades at 15.5 times its projected 12-month earnings. The MSCI Emerging Markets Index is valued at a multiple of 10.9.