BENGALURU (Reuters) – Indian shares plunged lower on Tuesday as gains in metals and energy stocks outpaced losses in banks after the central bank said domestic lenders could see double-digit bad loans.
The NSE Nifty 50 blue index slipped 0.1% to 14,473 and the BSE Sensex benchmark S&P decreased 0.25% to 49,143.75 by 0505 GMT.
Banks were the main loser, with Nifty ‘s bank index shrinking 0.74% and Nifty’ s private bank index shrinking 0.6%.
Late Monday, the Financial Stability and Development Council said in a report that the total non-performing assets of Indian banks could rise from 7.5% in September 2020 to 14.8% under extreme pressure conditions.
“Markets are trying to consolidate … Investors build ideas from (corporate) returns to the union budget,” said Gaurav Garg, head of research at CapitalVia Global Research.
“The financial sustainability report is definitely a red flag for banks. Public sector banks may be more affected than private banks. ”
Shares of Gail (India) Ltd rose 5.8% to a 15-month high of 143.5 rupees after the state-owned gas circulation company considered a proposal to buy back shares.
Tata Motors rose 6.9%, driven by a two-fold increase in China sales of the Jaguar Land Rover (JLR) luxury car unit.
Indian investors are now awaiting sales inflation data later in the day, with a Reuters poll claiming that it fell sharply last month, landing within the target range of the Reserve Bank of India.
Meanwhile, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3% after hitting a high on Monday.
Reporting by Nallur Sethuraman in Bengaluru; Edited by Subhranshu Sahu