Sensex, Nifty fall as China tensions, Fed weigh; banks drop

Indian shares fell on Thursday, dragged down by banking stocks, as China tensions remained in focus and after global markets gave up gains despite the U.S. Federal Reserve saying it would keep interest rates near zero.

The blue-chip NSE Nifty 50 index fell 0.30% to 11,569.70 and the benchmark S&P BSE Sensex 0.33% to 39,172.65 by 0457 GMT.

Indian and Chinese border troops had an exchange of gunfire last week just days before a meeting of their foreign ministers, Indian officials said on Wednesday, adding that the shooting, which neither side has made public, was apparently the most intense.

“The (China situation) is not going to go away easily… it looks like it will be a long-drawn battle,” said AK Prabhakar, head of research at IDBI Capital in Mumbai.

Denting sentiment further, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.82% after the Fed stopped short of offering further on U.S. stimulus.

The Nifty Bank Index fell 0.69%, with HDFC Bank Ltd and ICICI Bank Ltd falling as much as 1.4% and 1.8%, respectively. Both the stocks were among the top drags on the Nifty 50.

Defensive sectors such as pharma and IT were among the few sectors to gain, with the Nifty Pharma Index rising 0.19% and the Nifty IT index climbing 1.21%.

Dr.Reddy’s Laboratories Ltd was among the top boosts to the Nifty 50, a day after Russia’s sovereign wealth fund said it will cooperate with the company to test and supply Russia’s Sputnik-V COVID-19 vaccine in India.

Technology firm Happiest Minds Technologies Ltd more than doubled in its stock market debut, underscoring strong investor interest in IT services firms during the COVID-19 pandemic.

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