Sensex marks 10-week low; banks slump

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex fell for a fifth consecutive session on Thursday to its lowest in 10 weeks as blue chips including banks slumped with the U.S. Federal Reserve continuing to scale back stimulus despite the turmoil in emerging markets.

Risk aversion took a toll on banks<.NSEBANK>, knocking them off 2.7 percent. The NSE's banking sub-index, which has lost 9.4 percent in the last six sessions, hit the lowest since October.

Dealers warn the NSE may continue to fall in the medium term as it has breached the 6,100 level - which has served as an important resistance in January and July 2013 - and was around its 100-day moving average.

 

Traders say foreign inflows and developments in emerging markets would be closely watched. Foreign investors have sold $1 billion in debt in the last five sessions to Tuesday and $412.26 million in shares over last four sessions to Wednesday.

"With most negative news such as rate hike, Fed tapering out of the way, flows and emerging market action would be the key for Indian shares," said G Chokkalingam, founder of research and fund advisory company Equinomics.

The Sensex fell 0.72 percent, or 149.05 points, to end at 20,498.25, marking its fifth consecutive day of falls.

The Nifty lost 0.76 percent, or 46.55 points, to end at 6,073.70.

Global equities hit 2-1/2-month lows on Thursday after the Fed announced a further $10 billion cut in its monthly bond purchases in a statement after its two-day policy meeting.

Bank shares led the fall, with ICICI Bank Ltd declining 2.7 percent and HDFC Bank Ltd losing 2.1 percent.

Among state-owned banks, State Bank of India fell 3.6 percent, while Bank of Baroda dropped 4.4 percent.

In other rate-sensitive stocks, DLF Ltd slumped 4.6 percent, while IDFC Ltd lost 2.5 percent.

Bank of India shares plunged 10.7 percent after its chairman gave muted outlook on asset quality, citing total debt restructuring pipeline of 15-17 billion rupees by March.

However among stocks that gained, Voltas Ltd rose 7.3 percent after the company's operating profit beat some analysts' expectations, dealers said.

(Editing by Anand Basu)