Indian stocks declined, led by consumer goods companies, as some investors judged the six-day rally was excessive.
Hindustan Unilever, the biggest home-products maker, retreated the most in six weeks, while Asian Paints and cigarette maker ITC, lost at least 1.3%. Sun Pharmaceutical Industries, the most valuable drugmaker, slid the most in two weeks. Housing Development Finance Corp fell for the first time in eight days.
The S&P BSE Sensex lost 0.16% to 25,838.14 points  at the close in Mumbai, after changing direction at least 20 times. The gauge has risen 13% from a February low, sending its 14-day relative strength index to near the 70 threshold, which some investors see as a signal to sell. Investors are focused on the March quarter earnings to look for signs of economic growth filtering through to company bottom lines. Profits have dropped in four of the past five quarters in the worst run since the global financial crisis.
“We have seen a superb rally over the past two months and now all eyes are on how the earnings season pans out,” R K Gupta, managing director of Taurus Asset Management Co, which has $590mn, said from New Delhi. “The market is at a crossroad.”
Reliance Industries, owner of the world’s largest refining complex, may say its fourth-quarter profit rose 12% to 70.2bn rupees, according to the median estimate in a Bloomberg survey. The stock slid 0.2%. HDFC Bank, the most valuable lender, said profit rose 20% to 33.7bn rupees, matching the 33.9bn rupees estimated by analysts. The stock rose 0.1%.
So far, three out of four Sensex companies have reported earnings that beat or matched estimates. The gauge rose 0.8% this week. Hindustan Unilever lost 2.2%, the most since March 8. Housing Development Finance slid 1.6% after a seven-day, 7.4% rally. Sun Pharmaceutical fell 1.5%. Asian Paints lost 2%, ending a six-day climb. ITC decreased 1.3% to its lowest level since April 12.
Maruti Suzuki India, the maker of half the cars sold in India, advanced to its highest level since February 3. State Bank of India, the biggest lender, rallied 3%. The stocks were the best performers on the Sensex.
Oil & Natural Gas Corp, the largest state explorer, added 1.5% to pare this year’s loss to 10%. Tata Motors, owner of Jaguar Land Rover, rose 1.3%.
Overseas funds sold almost $2mn of domestic equities on April 20, paring this year’s inflows to $1.4bn. The Sensex has lost 1.1% this year and trades at 15.9 times 12-month projected earnings versus 12 for the MSCI Emerging Markets Index.
Meanwhile the rupee yesterday closed weaker against the US dollar for a second consecutive session, tracking losses in the Asian currencies market.
The currency closed at 66.48, down 0.13% from its previous close of 66.40. The rupee opened at 66.51 and touched a high and a low of 66.47 and 66.60, respectively in intraday trade.
“The Indian rupee has been caught oscillating between 66 and 66.70 on spot for the last few days. Custodial banks and exporters have been active sellers into the dollar strength but at the same time demand from reserve manager has kept the pair support closer to 66.15 levels. On one hand clear hint from the central bank that would not let portfolio remarkably change the value of rupee as well the hint to debt monetisation and reserve monetisation are rupee negative but it is being countered by still risk-on move in EMs,” Kotak Securities said in a note.