Indian stocks dropped for the first time in four days in volatile trading amid expiry of derivatives contracts and as investors awaited quarterly earnings reports from some of the nation’s largest companies including ICICI Bank and Maruti Suzuki India. ICICI Bank, the largest private lender, halted four days of gains. Maruti Suzuki, the maker of half the cars sold in India, was little changed after falling as much as 2%. Bharti Airtel slid to its lowest level since March 2014 before its results. Hindustan Unilever and Mahindra & Mahindra were the top performers on the S&P BSE Sensex.
The Sensex lost 0.1% at the close in Mumbai, after changing direction at least 20 times. Investor attention turned to corporate results as the Federal Reserve indicated on Wednesday that it will raise interest rates at a gradual pace while watching to see the effect of the turmoil in global markets on the US economy. The Sensex is on course for the worst January since 2011, as foreigners sold $1.7bn of local assets amid worries about global growth and a rout in oil prices.
“The earnings season hasn’t been disappointing so far but the remainder of the results have to show growth for us to decisively say that we have seen the bottom,” Gaurang Shah, vice president at Geojit BNP Paribas Financial Services, said in an interview with Bloomberg TV India yesterday. “We’re stuck in a range until then.” Six of the 12 Sensex firms that have posted December-quarter results so far have beaten or matched estimates, versus 57% in the three months ended September and 60% in June, data compiled by Bloomberg show.
ICICI Bank reported after market hours the slowest quarterly profit growth in six years as bad loans surged. Net income climbed 4.5% to Rs30.2bn ($443mn) in December quarter, missing the Rs30.6bn mean of 30 analyst estimates compiled by Bloomberg. The shares declined 1.7%, taking this year’s loss to 11%. The stock slumped 26% in 2015.
“The results show the tremendous pressure that ICICI is going through on asset quality,” Chokkalingam G, managing director at Equinomics Research in Mumbai, said in an interview to Bloomberg TV India. “A lot of this has been priced into the stock to a large extent. I don’t expect any panic tomorrow.” 
Bharti Airtel reported after market hours its first profit drop in nine quarters. Earnings retreated 22% to Rs11.2bn, missing the Rs12.3bn mean estimate compiled by Bloomberg. The shares, which have slid 14% this month, were among the biggest decliners on the Sensex.
Maruti Suzuki is expected to post a 66% jump in net income to Rs13.3bn. The stock, the best performer on the Sensex in 2015, lost 0.2%.
Housing Development Finance Corp, India’s biggest mortgage lender, dropped 1.9% after its third-quarter profit missed estimates. The company reported after trading ended on Wednesday a net income of Rs15.2bn, missing the Rs15.6bn estimated by analysts.
The 50-stock Nifty index lost 0.2% to 7,424.65 at the close. Traders rolled over 67% of futures contracts at 4:11 pm to the February series that starts today. That compares with a six-month mean of 72%, data compiled by Bloomberg show.
Hindustan Unilever surged the most since September 30, while ITC, the biggest cigarette company, added 1.8%. Mahindra rallied to its highest level since January 13. The Sensex trades at 14.7 times its projected 12-month profits, versus a multiple of 10.6 for the MSCI Emerging Markets Index. Overseas funds bought a net $18mn of local stocks on January 25, halting seven days of outflows.
Meanwhile, India’s rupee dropped to the lowest level in more than two years on speculation oil importers stepped up dollar purchases to pay month-end bills.
The rupee fell 0.3% to 68.2250 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg. It declined to 68.2575 earlier, the weakest level since September 2013. Sovereign notes declined.
The Indian currency has weakened over 3% this month in Asia’s worst performance as global stock markets plunged and oil fell below $30 a barrel. India’s benchmark equities gauge, which dropped 0.1% yesterday, has lost more than 6% this year. There’s a growing chance the central bank will cut lenders’ reserve ratios, Radhika Rao, a Singapore-based economist at DBS Bank, wrote in a research note yesterday.
“The month-end demand for dollars continues,” said Paresh Nayar, the Mumbai-based head of currency and money markets at the local unit of South African lender FirstRand. “Sentiment remains weak after the currency breached the 68 level, indicating the central bank isn’t protecting any level.”