A better-than-expected GDP data failed to cheer the street and India's equity markets slipped for the third straight session, ending the holiday-shortened week on a weak note.
On Thursday, the BSE Sensex ended down 137 points or 0.40 per cent at 34,046.94 and the wider NSE Nifty 50 index fell 35 points or 0.3 per cent to close at 10,458.35 level. Markets are closed on Friday on account of Holi.
For the week, the Sensex and Nifty were down 0.3 per cent.
Global markets were also mixed on Thursday. In Asia, Japan's Nikkei and Korea's Kospi tumbled more than 1 per cent and across Europe, London's FTSE 100 and France's CAC40 were also trading lower.
Banking stocks have been the biggest drag on India's equity markets in recent days, as the alleged fraud at Punjab National Bank, in which billionaire jeweller Nirav Modi is the prime accused, weighed. Earlier this week, the state-owned lender had said that the quantum of the unauthorised transactions may have been higher by around Rs 1,300 crore, taking the estimated quantum to Rs 12,600 crore.
ICICI Bank was the biggest loser on Thursday, the country's largest private sector lender declined 2.6 per cent. A top official of the bank was grilled by the CBI this week in relation to the PNB fraud and ICICI Bank had clarified that while it had no exposure to the Nirav Modi group of companies, it was part of the working capital lender consortium in Mehul Choksi's Gitanjali Group.
Among other major losers, State Bank of India fell 2.3 per cent. The country's largest lender had on Wednesday raised fixed deposit rates across tenors on retail as well as bulk deposits and on Thursday, it also increased its marginal cost of lending-based (MCLR) lending rate, a move that will make loans expensive.
Infosys, Adani Ports, Axis Bank, Hero MotoCorp, ITC, Power Grid and Reliance Industries were among the other losers. On the other hand, Coal India, Hindustan Unilever, IndusInd Bank, Kotak Mahindra Bank, Mahindra and Mahindra and ONGC ended in the green.
“After witnessing better than expected GDP data for the third quarter, domestically, the focus of the markets in immediate near term will be on passage of budget in parliament session, GST council meeting and implementation of e-way bill as well as advance tax collection figures by mid-March,” said Teena Virmani, vice-president at Kotak Securities.
Apart from domestic concerns, investors are also worried over possible faster interest rate hikes by the Federal Reserve, in the wake of a strong US economic growth.
“Globally, all eyes will be on new Fed Chairman's decision on interest rate hikes. Stronger outlook for economic growth in the US has raised the likelihood that further policy firming is on the way. Global (bond) yields as well as oil prices will also be continuously watched out for,” added Virmani.
Foreign institutional investors who were net buyers in January, turned net sellers in February. FIIs pulled out Rs 11,037 crore from India's equity markets, last month after a long-term capital gains tax was proposed in the Budget and the prospects of further rate hikes in the US increased.