Shares drop for first time in five days as lenders fall

State Bank of India fell the most a week, with a gauge of lenders ending a four-day, 4.6 per cent climb. Tata Steel slid to a two-week low, leading declines on the S&P BSE India Metal Index. Mahindra & Mahindra, India’s largest maker of sport-utility vehicles and tractors, lost 1.4 per cent.

The S&P BSE Sensex tumbled 0.9 per cent to 20,536.64 at the close, halting a four-day, 2.6 per cent advance. The MSCI Asia Pacific Index declined from a one-month high after a Chinese manufacturing gauge fell to a seven-month low and the US Federal Reserve signaled cuts in stimulus will likely continue.

“A decline was very much on the cards” after the recent rally, P. Phani Sekhar, a fund manager at Angel Broking Ltd., said in an interview today. “The Fed signaling that it is on course for more tightening caused jitters.”

State Bank lost 1.8 per cent, while ICICI Bank, the country’s second-biggest lender, decreased 2.2 per cent, the worst performer on the Sensex. HDFC Bank, the largest by market value, lost 1.1 per cent.

Tata Steel tumbled 1.9 per cent to its lowest level since Feb. 6. Steel Authority of India lost 2.3 per cent. Aluminum maker Hindalco Industries slid 1.5 per cent. The BSE Metal index tumbled to its lowest level since February 4.

Mahindra & Mahindra dropped 1.4 per cent. Oil & Natural Gas Corp lost 1.2 per cent.

The Sensex trades at 13.2 times estimated 12-month profits, compared with the average multiple of 14.4 over the past five years. The MSCI Emerging Markets Index trades at 10.1 times.