Sensex, Nifty fall to one-week closing low on profit taking

By Abhishek Vishnoi

MUMBAI (Reuters) - The Sensex and Nifty fell on Monday to their lowest close in a week, as profit-taking hit shares of blue-chips such as ICICI Bank Ltd for a second consecutive session after the record highs of last week.

Caution also prevailed ahead of the expiry of monthly derivatives contracts due on Thursday and ahead of key earnings such as Bharti Airtel Ltd and ICICI Bank in a holiday-shortened week.

The U.S. Federal Reserve's monetary policy statement on Wednesday is also on watch, especially for interest-rate outlook and any risk aversion towards emerging markets like India.

"The week is chock-a-block with economic events. If the Nifty (NSE index) manages to close above the 7,850 mark, which presently looks difficult, we can possibly gun for the 8,050 mark. Support is at 7,650," said Jyotheesh Kumar, executive vice-president of HDFC Securities.

The Reserve Bank of India's monetary policy review on Aug. 5 would be the next big trigger for Indian shares, which have rallied nearly 23 percent so far this year on optimism around reforms from the newly elected Narendra Modi government.

The broader Nifty lost 0.54 percent, or 41.75 points, to end at 7,748.70. It hit a record high of 7,840.95 on Friday.

The benchmark Sensex fell 0.52 percent, or 135.52 points, to end at 25,991.23, closing below the psychologically important 26,000 level.

Both indexes marked their lowest close since July 21.

ICICI Bank fell 1.5 percent after gaining over 34 percent in 2014 till Friday's close, while Reliance Industries Ltd ended down 1.6 percent.

Among other blue-chips, Tata Steel Ltd fell 1.7 percent, while Power Grid Corp of India lost 1.2 percent.

Engineering company Larsen and Toubro fell 1 percent ahead of its June-quarter results later in the day. The company later said its April-June net profit more than doubled to 9.67 billion rupees.

Other recent outperformers also fell. Housing Development Finance Corp ended 0.1 percent lower, while Kotak Mahindra Bank Ltd fell 0.4 percent.

Tata Motors fell 1.6 percent, adding to Friday's 5 percent decline after its unit Jaguar Land Rover said it would cut prices of three models in China due to the government's anti-monopoly probe.

Havells India Ltd fell 2.1 percent after April-June earnings lagged estimates as additional depreciation due to changes in the Companies Act and expiry of certain tax exemptions weighed on results.

Among the gainers, Hindustan Unilever rose 3.5 percent after better-than-expected volume growth in the April-June quarter translated into earnings that beat estimates.

Bank of Baroda gained 0.5 percent after posting better-than-expected quarterly earnings of 13.62 billion rupees, helped by lower non-tax provisions and improved net interest income.

(Editing by Prateek Chatterjee)