Indian shares fell for a second straight day on Thursday as investors turned cautious on the expiry of derivatives contracts, while the rupee hit a record low amid intensifying global trade war. The broader NSE index ended 0.77 percent lower at 10,589.10, while the benchmark BSE index closed 0.51 percent lower at 35,037.64.
Financials dragged the indexes down with private lender ICICI Bank Ltd and index heavyweight Housing Development Finance Corp Ltd ending lower by nearly 3 percent and 1.4 percent, respectively. India imports about 80 percent of its crude oil needs and a weaker rupee and higher oil prices are expected to put pressure on the country's trade deficit which hit a four-month high in May driven mainly by a 50 percent surge in oil import bill.
Meanwhile, worries over mounting global trade war fears kept markets across Asia jittery with the MSCI's broadest index of Asia-Pacific shares outside Japan trading 0.7 percent lower. "(We are) expecting expiry near 10,700. If you look at the second half of this (derivatives) series, macros have worsened a lot, be it the rupee or crude, which has impacted bullish sentiment," said Rahul Sharma, senior research analyst with Equity99, a Mumbai-based investment advisory firm.
The Indian rupee for the first time breached the 69 per dollar mark, tracking Asian peers hurt by weakening macro-economic fundamentals.
Titan Company Ltd and Tech Mahindra Ltd were trading more than 3 percent lower each, and were among the top percentage losers on the NSE index. State-run lenders continued to be under heavy selling pressure with the Nifty PSU Bank index on track to post a fourth straight session of loss.
Indian Bank dropped as much as 4.3 percent after it withdrew dividend payment plan of 6 rupees per share.