Most Indian stocks dropped as trading resumed after a public holiday on Wednesday, with software exporters and material producers offsetting gains in finance and healthcare companies.
Three stocks dropped for every two that climbed on the S&P BSE Sensex, which added 0.1% at the close after changing direction at least nine times. The gauge rose to an eight-month high on Monday before sliding 0.4% the following day.
Tata Consultancy Services, the largest software exporter, and Tata Steel, were the biggest drags on the gauge, falling 2.2% and 4.8% each. Drugmaker Lupin jumped 6% in the last few minutes of trade after the US FDA closed inspection carried out at Goa plant in July 2015. Dr Reddy’s Laboratories rallied to its highest price since November. Housing Development Finance Corp and HDFC Bank led gains among financial companies.
The Sensex has rallied 19% from a low in February, approaching the 20% advance that defines a bull market. The gains have been powered by forecasts for above-normal rain after back-to-back droughts and as earnings recovered in the three months ended March after falling in four of the previous five periods. All eyes are now on the June-quarter reporting season that begins next week with Infosys on July 15.
“We see the market consolidating at current levels,”  aid Chokkalingam G, managing director at Equinomics Research & Advisory Pvt in Mumbai. “The next leg up will come from the June quarter earnings and further progress of the monsoon rains. The monsoon session of parliament is also important as the GST bill may be passed.”
The government is confident the goods-and-services tax bill will be passed in the month-long session of parliament that starts July 18, Santosh Gangwar, who took charge as Junior Finance Minister on Wednesday, said in New Delhi.
Shares of media companies soared after news that the government is considering a plan to raise the limit on foreign direct investment in newspapers and magazines. The Finance Ministry recommended raising the cap to 49% from 26%, bringing it on par with that for news television channels, two government officials said, asking not to be identified citing rules for speaking with the media. The Department of Industrial Policy and Promotion will decide on the matter, they added.
The Sensex has risen 4.2% this year and trades at 16.4 times projected 12-months profits, versus a five-year mean of 14.3 and a multiple of 11.8 for the MSCI Emerging Markets Index, data compiled by Bloomberg show. Foreign investors bought $44mn of local shares on July 5, taking this year’s inflows to $3bn. 
Meanwhile, the rupee recovered marginally by 3 paise to 67.42 against the dollar yesterday.