Indian shares ended lower for a fourth straight session on Friday, weighed down by banking stocks, as the government's plan for $7.7 billion stimulus spending raised concerns over fiscal deficit. The broader NSE index closed down 1.56 percent at 9,964.40, while the benchmark BSE index fell 1.38 percent to 31,922.44. Both indexes posted their biggest intraday percentage decline in 10 months.
The NSE index lost 1.22 percent this week, while the BSE index fell 1.09 percent. Both indexes posted weekly losses for a second time this month. India is considering a plan to loosen the fiscal deficit target so that it could spend an additional 500 billion rupees ($7.71 billion) in the financial year ending March 2018, two government sources said on Thursday.
Finance Minister Arun Jaitley had said earlier that the government was looking for ways to lift economic growth, which slipped to a three-year low of 5.7 percent in the quarter to end-June. Global investor sentiment was subdued after North Korea said it might test a hydrogen bomb in the Pacific Ocean and escalated a war of words with US President Donald Trump.
"This remains a potential threat to the overall markets," said Teena Virmani, vice president, Kotak Securities. "Valuations are still a concern. There will be some kind of profit-booking at these levels wherein a large amount of froth had been built up in the last 1-1/2 months," said Virmani. Banks were the top losers, with the NSE Bank index shedding as much as 1.6 percent in what could be its fourth straight session of decline.
ICICI Bank Ltd fell as much as 2.6 percent, extending declines into a third session, while Yes Bank Ltd dropped as much as 4.7 percent after four consecutive sessions of gains. The rupee breached the 65 per dollar level, hitting its weakest point since April at 65.15 per dollar.