MUMBAI, Jan 29 (Reuters): India's NSE index fell for a fourth consecutive session on Wednesday to its lowest close in two months as banks were hit after biggest Indian private lender ICICI Bank said bad loans had risen and it would set aside more funds.
Indian banks had already fallen 0.3 per cent on Tuesday after the Reserve Bank of India surprised investors by raising interest rates for the third time in five months to contain inflation.
The hike in rates did help boost the rupee at a time when emerging markets were under pressure, but stock investors are concerned about its potential impact on economic growth.
Overseas investors have sold shares worth $452 million since Thursday's close amid turmoil in emerging markets. Volumes on the benchmark BSE index sank to the lowest in four days, with caution also prevailing ahead of the conclusion of the United States Federal Reserve's policy meeting later in the day.
The Fed is widely expected to continue reducing its monthly bond purchases by $10 billion a month. "I think the decision on tapering is crucial for global markets including India. $5-10 billion is okay but anything beyond that would be a shock for us," said Sudip Bandyopadhyay, managing director at Destimoney Securities Pvt Ltd.
The broader NSE index lost 0.1 per cent, or 6 points, to end at 6,120.25, its lowest close since Nov. 28. The BSE index fell 0.18 per cent, or 36.21 points, to end at 20,647.30, extending its losing streak for a fourth consecutive session.
ICICI Bank Ltd fell 1.7 per cent after its chief executive officer said she expects addition in bad loans and restructured debt to continue in the coming quarters.
The bank's December-quarter net non-performing loans rose to 0.94 per cent versus 0.76 per cent a year ago. Among other financial stocks, Housing Development Finance Corporation Ltd fell 0.7 per cent while State Bank of India Ltd ended 1.4 per cent lower.
Bharti Airtel Ltd lost 1.3 per cent, having earlier risen as much as 2.86 per cent, after October-December voice minutes on its India mobile network grew 1.47 per cent quarter-on-quarter, lagging some analysts' expectations.
Sesa Sterlite fell 3.2 per cent after the company reported December-quarter net profit of 18.68 billion rupees, which lagged some analysts expectations.
