The Sensex and Nifty fell on Thursday to post their biggest daily percentage loss in four weeks after earnings from HDFC Bank and Kotak Mahindra Bank raised some concerns about bad loans ratios in the sector.

HDFC Bank fell 0.3 per cent, while Kotak Mahindra Bank fell 2.8 per cent. Both banks hit record highs earlier in the session

The BSE index plunged 205.37 points or 0.74 per cent to 27,710.52.

The broader NSE index lost 55.75 points or 0.65 per cent to end at 8,510.10, retreating after hitting its highest since August 6 in the previous session.

Barring FMCG and oil & gas, all other BSE sectoral indices ended lower. Among them, power index fell the most by 2.1 per cent, banking 1.7 per cent, capital goods 1.01 per cent and healthcare 0.8 per cent. On the other hand, FMCG index was up 0.16 per cent and oil & gas 0.06 per cent.

Top five Sensex gainers were Coal India (+1.21%), Adani Ports (+1.13%), Asian Paints (+1.06%), Bharti Airtel (+0.84%) and Wipro (+0.72%), while the major losers were Axis Bank (-3.62%), Power Grid (-3.13%), State Bank of India (-2.3%), Dr Reddy's (-2.15%) and ICICI Bank (-2.13%).

Hindustan Zinc Ltd fell nearly 3 per cent after posting a 47 per cent fall in quarterly profit on Wednesday, while Larsen & Toubro Infotech Ltd fell as much as 6 per cent on its market debut.

Revamped GST Bill

Investors are waiting to see whether the government can pass a revamped Goods and Services Tax Bill in the ongoing Parliament session.

But overall, analysts said markets would likely retain their positive tone, with the NSE index up 3.4 per cent this month as of Wednesday's close, its fifth consecutive monthly gain.

“Last couple of days we've been going below 8,500 and managing to close above 8,500. So that's a positive takeaway for markets,” said Gaurang Shah, vice president at Geojit BNP Paribas Financial Services, referring to the NSE index.

World stocks hit near nine-month highs on Thursday as talk of another super-sized shot of stimulus from Japan helped buoy the mood ahead of the European Central Bank's first post-Brexit meeting.

European stock markets fell on Thursday, weighed down by a drop in the shares of major airlines after Lufthansa issued a profit warning.

A report by SMC Global said: " Asian equities rose to this year's high, while the yen and New Zealand's dollar sank to six-week lows amid signs regional policy makers are preparing to unleash stimulus at a time when corporate earnings are proving more resilient than analysts anticipated. US stocks closed higher on Wednesday, with the Dow ending at a record high for the seventh day in a row as better-than-expected earnings boosted optimism on Wall Street. US housing starts jumped 4.8 per cent to an annual rate of 1.189 million in June from the revised May estimate of 1.135 million. Economists hadexpected housing starts to edge up by 0.5 per cent to a rate of 1.170 million from the 1.164 million originally reported for the previous month."

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