Indian stocks declined the most in a month amid concern the rally that drove the benchmark index to a record has exceeded the outlook for earnings growth.

ICICI Bank Ltd. (ICICIBC), the country’s second-biggest lender, fell after climbing to an all-time high yesterday. Tata Steel Ltd. (TATA), the biggest producer of the alloy, slid for the fourth time in five days. Aluminum producer Hindalco Industries Ltd. (HNDL) was the worst performer on the S&P BSE Sensex (SENSEX), which slid 0.4 percent to 28,385.62 at 11:02 a.m. in Mumbai.

The gauge extended a fifth weekly advance yesterday after China’s unexpected reduction in interest rates spurred a rally in Asian stocks. The Sensex is valued at 15.8 times projected 12-month profits, compared with its three-year average of 13.8, data compiled by Bloomberg show. The gauge’s relative strength index rose to 75.3 yesterday, above the 70 threshold seen by some investors as a signal to sell.

“With the Indian market having gone up significantly, there’s a risk it could be getting a bit ahead of itself,” Timothy Moe, chief Asia Pacific strategist at Goldman Sachs Group Inc., said in Hong Kong today. “We think the valuations are a little bit rich but if we’re right about the fundamental story we think the market could quickly overcome that.”

The Sensex has risen for five straight weeks as foreigners plowed $ 15.4 billion into equities, the most among eight Asian markets tracked by Bloomberg, and on speculation easing price pressures has given the central bank more room to cut interest rates at its review on Dec. 2. The gauge has risen 35 percent in 2014, the top performer among the world’s 10 biggest markets.

ICICI Bank declined 1.5 percent, ending a five-day rally that drove its 14-day relative strength index to 77 yesterday. State Bank of India lost 1 percent, falling from its highest level since December 2010.

Hindalco retreated 4 percent, the most since Nov. 5. Tata Steel slid 2.9 percent. Sesa Sterlite Ltd., the biggest copper producer, declined 1.9 percent.

Global funds bought a net $ 43.6 million of local shares on Nov. 21, taking this year’s inflow to $ 15.4 billion, the most among eight Asian markets tracked by Bloomberg.

The winter session of Indian parliament began yesterday amid speculation Prime Minister Narendra Modi’s government will pass key bills to cut red tape and open the economy to further foreign investment.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at; Kana Nishizawa in Hong Kong at

To contact the editors responsible for this story: Michael Patterson at Ravil Shirodkar, Chan Tien Hin