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India stocks fall led by drags in HDFC Bank; Fed decision awaited

A bird flies past a screen displaying the Sensex results on the facade of BSE building in Mumbai

A bird flies past a screen displaying the Sensex results on the facade of the Bombay Stock Exchange (BSE) building in Mumbai, February 1, 2023. REUTERS/Niharika Kulkarni Acquire Licensing Rights

Sept 20 (Reuters) – India’s benchmark indexes fell on Wednesday, led by drags in HDFC Bank, after the country’s largest private lender flagged a hit to its asset quality post its merger with HDFC Ltd.

The Nifty 50 (.NSEI) fell 0.64% to 20,002.75 points at 10:00 IST, poised for its worst session in almost a month. The S&P BSE Sensex (.BSESN) dropped as much as 0.9% to 66,985.36 points, on track to see its worst day since early August.

The more domestically focussed mid-cap (.NIFMDCP100) and small-cap firms (.NIFSMCP100) were down 0.1% each.

HDFC Bank (HDBK.NS) slipped as much as 3.3%, emerging as the Nifty 50’s top loser after it said the completed merger with HDFC Ltd would affect some key financial ratios such as its net interest margin and non-performing assets.

“There was lot of uncertainty with respect to how the numbers of merged entity would be,” said Apurva Sheth, head of market perspective and research at Samco Securities.

“With the recently concluded analyst meet, the management has tried to give some clarity,” he added.

That in turn dragged the overall banking index (.NSEBANK), which dropped about 0.7% and was on track for its biggest intraday drop since late August.

Finance (.NIFTYFIN) also saw its worst session since Aug 3, falling as much as 1.2%.

Other sectors such as IT (.NIFTYIT) and oil and gas (.NIFOILGAS) added pressure on the benchmark, falling 0.4% and 0.6%, respectively.

Globally, markets expect the U.S Federal Reserve to opt for a pause at the conclusion of its two-day meeting later in the global day, albeit with a hawkish stance.

Among individual stocks, shares of textile-to-oil conglomerate Reliance Industries (RELI.NS) fell 1.9% on multiple block deals, according to LSE data.

(This story has been corrected to fix attribution in paragraph 5)

Reporting by Archishma Iyer in Bengaluru; Editing by Janane Venkatraman

Our Standards: The Thomson Reuters Trust Principles.

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