Markets end lower, ICICI Bank slips 2%

The markets ended in the red due to selling pressure in frontline stocks - ICICI Bank, Bharti Airtel and Tata Power, shrugging off firm cues from Europe.

The Nifty opened in the negative and touched a low of 5,128 tracking weak global cues. The index changed lanes and touched a high of 5,184 in the afternoon session following a recovery in Asian indices and rally in European markets. However, selling in select banking and frontline shares dragged the index in the last leg of the trade. The Nifty finally ended at 5,138, down 23 points and the Sensex closed at 17,059, down 71 points.

ICICI Bank, Bharti Airtel, Tata Power and State Bank of India dragged the Sensex down by 63 points.

In Asia, reports of a potential change in monetary policy stance by China provided some succor to frayed investor nerves. Most of the indices recovered from morning lows, Japan's Nikkei Stock Average fell 0.8%, Hong Kong's Hang Seng Index fell 1.5%, but the Shanghai Composite Index was up 0.5%.

In Europe banking shares lead the gains after the heavy battering seen on Wednesday on back of upbeat results. The indices gave up early gains, the French CAC 40 index was down 0.6%, Germany’s DAX 30 index gained 0.9% and the FTSE 100 index was up 0.5%.

Back in India, analysts said that there is still some more pain left for the markets given the global uncertainties. Tarun Sisodia, Executive Director (Institutional Equity) from Anand Rathi said, “Any further downgrade by rating agencies with respect to the European countries could lead to another round of sell-off.”

Food inflation for the week ended July 30 accelerated to 9.9% from 8.04% for the week ended July 23, highest in four months. High food inflation dampened hopes of a pause in the rate tightening cycle.

Among the sectoral indices BSE Banks and Realty were the main losers on expectations that RBI may hike rates by 25 bps in September.

Top losers from the banking space, Axis Bank declined 3%, ICICI Bank was off 2.2% and Bank of Baroda dipped 2.1%.

Top losers from the realty space were, Peninsula Land was down 2.5%, Indiabulls Real Estate declined 1.9% and Prestige Estates was off 1.8%.

Top losers on the Sensex were Tata Power, down 4.3%, Maruti Suzuki declined 2.5% and Jindal Steel was down 2.4%. Top gainers were HDFC, up 2.3%, NTPC added 1.5% and Coal India was up 1.2%.

From the broader markets, BSE midcap and the smallcap indices were the top losers, down 0.2% each.

Market breadth was positive, 1481 stocks declined for 1336 stocks which advanced.