The Sensex and Nifty ended lower on Friday, after investors booked profit in banks and financials with ICICI Bank the biggest drag on the NSE index ahead of its June-quarter earnings later in the day.

The NSE index notched up a 4.23 per cent gain in July, the highest in four months, while the benchmark BSE index rose 3.9 per cent. Both indexes are up for the fifth straight month.

The Nifty closed 27.8 points or 0.32 per cent down at 8,638.50, while the Sensex ended 156.76 points or 0.56 per cent down at 28,051.86.

Among BSE sectoral indices, auto index gained the most by 0.79 per cent, healthcare 0.72 per cent, oil & gas 0.51 per cent and power 0.17 per cent. On the other hand, consumer durables index was down 0.92 per cent, capital goods 0.73 per cent, banking and metal 0.63 per cent each.

Top five Sensex gainers were Adani Ports (+2.95%), Lupin (+2.15%), Bajaj Auto (+1.89%), Cipla (+1.83%) and HUL (+1.47%), while the major losers were ICICI Bank (-3.4%), Bharti Airtel (-2.7%), HDFC (-1.92%), Wipro (-1.32%) and L&T (-1.2%).

Shares of Eicher Motors hit a record high after the company posted a 58.6 per cent jump in its June-quarter net profit.

Expectations that the government would be able to pass the Goods and Services Tax Bill in the current session of Parliament helped shares of logistics companies gain. Gati Ltd and Allcargo Logistics rose 0.83 per cent and 3.66 per cent, respectively.

“Bank stocks are likely to witness selling pressure as their quarterly profits will be hit by increasing NPAs,” said R.K. Gupta, managing director at Taurus Asset Management.

“Expect correction in the markets over the next fortnight and the NSE to drop to 8,300-8,350 levels.”

Brokers said emergence of profit-booking by participants despite the beginning of August futures and options series, snapped the two-day winning streak.

Furthermore, a weak trend in Asia and overnight losses in the US markets, weighed on the domestic sentiment.

A report by IFA Global said: "Asian stock markets are trading almost flat, with Hang Seng index trading lower by 131 points and Nikkei index is trading lower by 65 points ahead of BoJ policy statement and a number of economic numbers from the euro zone and the US. US stock markets closed almost on a flat note, the Dow Jones Industrial Average closed marginally lower by 15 points and Nasdaq index closed marginally higher by 15 points. The US equity markets closed almost flat ahead of the important BoJ policy statement that will be released today. European stock markets closed in the red, with FTSE closing lower by 29 points and CAC closing lower by 26 points, European indices closed lower despite better-than-expected German inflation and unemployment number."

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