MUMBAI (Reuters) - The BSE Sensex and Nifty fell over 1 percent to mark a second consecutive session of declines on Thursday after blue-chips such as Housing Development Finance Corp tracked falls in Chinese stocks and the expiry of monthly derivatives contracts.
China's Shanghai Composite Index lost 1.9 percent, to 2,973.76, dropping below 3,000 - a key support level - for the first time since Dec. 17, and raising concerns of further falls.
The falls were accentuated in the second half of the session on redemption pressure at an Indian arbitrage fund that forced it to sell shares.
Faith in India's reform cycle remains robust after Prime Minister Narendra Modi resorted to a rarely-used executive decree on Wednesday to implement coal and insurance reforms after facing opposition in the parliament.
The benchmark BSE Sensex closed 1.08 percent lower while the broader Nifty lost 1.12 percent, marking their biggest daily fall in over a week.
(Reporting by Abhishek Vishnoi; Editing by Sunil Nair)
