ICICI Bank, L&T drag Sensex to 1-month low

The BSE benchmark index, which had gained 56 points yesterday, opened weak and traded in negative terrain for most of the session as metal, capital goods and bank shares were under pressure. The rupee, which slipped to near 56-levels against the US dollar, also made investors cautious.

A nearly 3.6 per cent drop in ICICI Bank shares, and L&T, which lost nearly 3 per cent weighed down the 30-share Sensex. RIL, which shed one per cent, also soured the sentiment.

The Sensex ended 127.53 points, or 0.73 per cent, down at 17,313.34, its lowest closing since August 3.

Likewise, the 50-share National Stock Exchange index fell by 48.30 points, or 0.92 per cent to close at 5,225.70.

"Metal shares declined following weakening in global commodity prices. Jindal Steel & Power and Hindalco hit 52- week lows. Selling pressure continued in capital goods on concerns over economic slowdown and consequent delay in execution of major power projects," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.

Traders said investors mostly ignored an improvement in country's services sector growth with HSBC's Services Purchasing Managers Index in August inching upwards to 55.

The coal block allocation issue cast its shadow on Parliament for the eleventh day today paralysing proceedings with BJP remaining unrelenting on the demand for resignation of Prime Minister Manmohan Singh.

Brokers said a weak trend in the Asian region and lower opening in Europe ahead of European Central Bank's meeting on Thursday, further influenced the domestic sentiment.

Among sectoral indices, the BSE-Metal suffered the most falling by 2.64 per cent. The BSE-Capital Goods sector index logged the second worst performance by losing 2.54 per cent.

The BSE-Bankex declined 1.82 per cent on worries over bad loans and growth prospects amid reports that Morgan Stanley downgraded rating on Axis Bank to 'underweight from 'equal weight'. (MORE)