Nifty falls to one-month low as financials drag

According to a report, the RBI told banks to set aside 50 per cent of the loan amount as likely losses in case of insolvency

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, India. REUTERS

India's broader Nifty index fell to a one-month low, dragged down by state-owned lenders amid reports that the central bank has raised provisioning requirements for loans submitted under the insolvency process.

The Reserve Bank of India has told banks to set aside at least 50 percent of the loan amount as likely losses for all cases referred to the insolvency process, the Economic Times reported citing two unidentified bank officials.

The broader NSE Nifty closed 0.66 percent lower at 9,511 while the benchmark S&P BSE Sensex declined 0.58 percent at 30,958. Markets were closed on Monday for a public holiday.

The Nifty PSU Bank index dropped 3.4 percent. Shares of state-owned lender SBI dropped 3.3 percent while Bank of Baroda slumped 3.6 percent.

Aviation stocks such as SpiceJet, Jet Airways and Interglobe Aviation declined for a second straight session as crude prices recovered following a slump last week.

Shares of NMDC dropped 2.8 percent after brokerage Citi downgraded the miner to 'Sell' from 'Neutral'.

Among the gainers, telecom equipment maker Tejas Networks rose 2.4 percent on its listing debut.

Videocon Industries rose 5 percent on block deals.

Shares of hit an upper circuit limit of 5 percent after it received a subsidy worth Rs 118 crore from the Maharashtra government.

Market breadth was in the favour of losers, with about 7 stocks falling to every 2 stock that advanced.

This article was first published on June 27, 2017