Reuters Market Eye - The 50-share Nifty is down 0.83 percent at 5,613.30, below the 200-day moving average which was at 5,638. The benchmark Sensex is 0.98 percent down. Developments in the Korean peninsula and U.S. jobs data due on Friday which will likely signal slowing U.S. growth, are overseas cues being closely watched.
Continued domestic political uncertainty and worries about early elections after the withdrawal of a key regional ally from the ruling coalition last month are weighing on investor sentiment.
Investors also await a speech by Rahul Gandhi, promoted by many as the Congress' likely next prime ministerial candidate, to a leading industry body later on Thursday.
Foreign investors were provisional net sellers worth 3.68 billion rupees of stocks on Wednesday, exchange data showed.
Indian banks' advances grew at a slower pace in 2012/13 compared with a year earlier, and fell short of the central bank's projection, hurt by lower demand for credit from companies in a slowing economy.
ICICI Bank is down 1.42 percent, HDFC Bank is down 1.3 percent while State Bank of India is down 1.3 percent.
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Technology share also fell tracking weak U.S equities: Infosys shares fall 1.1 percent while Tata Consultancy Services is 1.1 percent lower.
(Reporting by Manoj Dharra)