State Bank of India and Axis Bank Ltd. were among the top losers on the benchmark gauge. Asian Paints Ltd., the largest paint maker, retreated for a third day. NTPC Ltd., India's biggest power producer, fell the most in a week. Hindustan Unilever Ltd. lost 1 percent, while engineering company Larsen & Toubro Ltd. retreated 0.8 percent.
The S&P BSE Sensex slid 0.2 per cent at the close in Mumbai. There has only been one day the gauge has swung more than 1 percent since the start of May. The outcome of June 23 referendum on whether Britain will continue in the European Union will set the tone for the market, according to IDBI Capital Capital Market Services Ltd.
"We're stuck in a narrow range for the past three weeks or so and the market will break out decisively once clarity emerges on Brexit," A. K. Prabhakar, the head of research at IDBI Capital in Mumbai, said by phone. "We will also have more clarity on the monsoon's progress by July." He is advising clients to buy automakers and logistics companies.
The Sensex has risen 17 percent since hitting a bear market in February and is up 2.7 percent in 2016, as forecasts for the strongest monsoon rain in two decades and India's world-beating economic growth lured $2.8 billion in inflows from foreign funds this year. Overseas funds have bought $644 million of shares in June, set for the fourth month of purchases, data compiled by Bloomberg show.
Monsoon further advanced into parts of Maharashtra, Madhya Pradesh, Bihar and Uttar Pradesh, India Meteorological Department said on its website Tuesday. These states are home to the nation's biggest sugar and soybean-producing areas. Rainfall was 22 percent less than normal between June 1 and June 19, with the deficit set to shrink as the monsoon progresses, the agency said.
State Bank of India retreated 0.8 percent to pare this month's advance to 4.4 percent. Axis Bank declined to its lowest level in three weeks. Asian Paints decreased 1 percent to a one-month low. NTPC retreated 1.7 percent. Hindustan Unilever pared this year's climb to 2.6 percent.
Textile companies rallied after CNBC TV said the government will meet Wednesday to consider a new policy for the sector.
Arvind Ltd., the biggest denim maker, surged 4.9 percent. Raymond Ltd. jumped the most in three weeks. Century Textiles & Industries Ltd. soared 4.6 percent, the most since April 6. Vardhman Textiles Ltd. rallied 4.4 percent and Gokaldas Exports Ltd. added 5.7 percent. Trident Ltd. climbed the most in four months.
©2016 Bloomberg L.P.