Indian shares end lower as oil stocks drag

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FE Team | Published: March 15, 2018 00:31:58

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Indian shares ended marginally lower on Wednesday as oil stocks such as Indian Oil Corp Ltd and Oil and Natural Gas Corporation Ltd fell after global crude prices firmed on strong Chinese factory data, reports Reuters.
The broader NSE index closed 0.15 per cent lower at 10,410.90, while the benchmark BSE index inched 0.06 per cent lower at 33,835.74.
Indian Oil dropped 3.1 per cent while ONGC fell 1.6 per cent.
Most financial stocks erased losses from earlier in the session, with the Nifty PSU bank index reversing course to close 1.8 per cent higher.
Punjab National Bank ended up 1.4 per cent.
An earlier report adds: Indian shares fell on Wednesday after a central bank directive banning issuance of letters of undertaking (LoU) by lenders hit bank stocks while revelations by Punjab National Bank of additional exposure in an alleged fraud further dampened sentiment.
The Reserve Bank of India (RBI) barred all lenders from issuing letters of undertaking (LoU) - a form of credit guarantee at the heart of a major fraud that shook the financial sector last month. The instruments are all forms of trade finance often used by importers to fund their overseas purchases.
Punjab National Bank told police on Tuesday that it had uncovered additional exposure of about 9.42 billion rupees ($144.83 mln) to Gitanjali group of companies, taking its overall exposure in connection with the fraud to well over the $2-billion mark.
The broader NSE index dropped 0.48 per cent to10,376.35 as of 0545 GMT, while the benchmark BSE index fell 0.45 per cent to 33,705.14.
"The selling in banking stocks on rising delinquencies along with RBI's move to ban LoUs and a weak international market is weighing on domestic stocks," said Saurabh Jain, assistant vice president of research at SMC Global Securities.