Nov. 16 (Bloomberg) -- India's Sensitive Index fell, paced by Larsen & Toubro Ltd. and ICICI Bank Ltd., as investors shifted focus to small and medium-sized companies from larger ones.

Cement companies, including Grasim Industries Ltd. and Madras Cements Ltd., gained on expectation of an increase in prices of the building material as construction activity picks up after the four-month monsoon period.

``Retail interest in small and mid-cap companies is rising and investors are trying to close the gap,'' said Amandeep Chopra, who helps manage the equivalent of $1.1 billion of stocks at UTI Asset Management in Mumbai. ``Most cement companies are operating at peak capacity utilization rates and there are expectations of a big price hike.''

The Bombay Stock Exchange's Sensitive Index, or Sensex, dropped 86.53 points, or 0.4 percent, to 19,698.36 after trading in a 366-point range. The 30-share index gained 4.2 percent during the week. The exchange's index for mid-cap companies rose 101.54 points, or 1.2 percent, to 8,512.38 and the marker for smaller companies gained 152.53, or 1.5 percent, to 10,380.73.

The number of stocks that rose on the Bombay Stock Exchange stood at 1,909 compared with 912 that declined, according to its Web site. The S&P/CNX Nifty Index on the National Stock Exchange fell 5.25 points, or 0.1 percent, to 5,906.85. Nifty futures for November delivery declined less than 0.1 percent to 5,913.55.

Larsen, ICICI

Larsen & Toubro, India's biggest engineering company, snapped a four-day rally. It fell 129.65 rupees, or 2.9 percent, to 4,375.85, after adding 9 percent in the previous four sessions.

ICICI Bank Ltd., India's biggest lender by value, fell for the second day. The stock declined 29.15 rupees, or 2.3 percent, to 1,219.45, after rising 12 percent in the three days to Nov. 14.

Shares of Grasim, India's third-biggest cement maker, rose the most in more than eight months. The stock gained 212.4 rupees, or 5.9 percent, to 3,831.45. Madras Cements gained 291.5, or 6.8 percent, to 4,572.1 rupees.

Software companies fell. Wells Fargo & Co. said the U.S. housing market is the worst since the Great Depression, sparking fears of a recession in the largest market for domestic software exporters.

Infosys Technologies Ltd., India's second-largest exporter of software, fell 29.55 rupees, or 1.8 percent, to 1,623.5.

Refiners Extend Gains

State-run refiners rose on the expectation income from processing crude oil into fuel will increase in the quarter that started Oct. 1.

Bharat Petroleum Corp., the nation's third-ranked state-run refiner, rose 7.65 rupees, or 1.8 percent, to 434.65. Hindustan Petroleum Corp., the second-biggest state-run refiner, gained 16.65 rupees, or 5.6 percent, to 316.5 rupees. Both stocks rose for the fourth day in a row.

Essar Oil Ltd., India's newest refiner, jumped 34.7 rupees, or 22 percent, to 192.35, rounding off a seven-day winning streak during which the stock price increased threefold. Essar Oil's board was scheduled to meet today to consider a proposal for a preferred offer of securities to the company's founders.

The following stocks rose or fell. Stock symbols are in brackets:

Godrej Industries Ltd. (GDSP IN) rose 5.75 rupees, or 2.3 percent, to 259 after the Indian maker of specialty chemicals and edible oils said it plans to raise 6 billion rupees ($153 million) by selling 27.9 million shares to large investors.

Triveni Engineering & Industries Ltd. (TRE IN) rose 1.7 rupees, or 1.3 percent, to 133.5 after the Indian sugar maker, which also has a steam-turbine division, informed the Bombay Stock Exchange yesterday its board would seek the approval of shareholders to raise as much as 2.5 billion rupees through a sale of securities.

Ranbaxy Laboratories Ltd. (RBXY IN) fell 11.95 rupees, or 2.8 percent, to 411.7 after saying in an e-mailed statement its unit was voluntarily recalling all lots of its 600-mg and 800-mg gabapentin tablets from the U.S. because it found the presence of ``related substances'' in them to be outside the approved specification limit.

To contact the reporter on this story: Shailendra Bhatnagar in New Delhi at sbhatnagar3@bloomberg.net.

Last Updated: November 16, 2007 08:13 EST