Indian shares fell on Thursday as concerns over high current account deficit and caution ahead of the upcoming Union Budget later this month overshadowed data showing continued moderation in inflation. The nation's headline inflation rate for January dipped to a more than three-year low of 6.62 percent from 7.18 percent in the previous month, government data showed.
Prime Minister's key economic advisor C Rangarajan said that he expects inflation to come down to 6.5 percent by end-March. The current account deficit, meanwhile, is expected to be higher than last year's level.
The benchmark BSE Sensex ended the session down 111 points or 0.57 percent at 19,497, while the broader Nifty index fell by 36 points or 0.61 percent to 5.897.
Shares of State Bank of India fell 2.1 percent after the state-owned lender posted a 4 percent rise in Q3 net profit amid higher provisioning for bad loans. Tata Motors tumbled 3 percent ahead of its results. After the closing bell, the nation's largest automaker said its consolidated net profit plunged 52 percent year-on-year to Rs. 1,627 crore in the third quarter, missing estimates.
Larsen & Toubro, Axis Bank, Reliance Industries, Wipro, Maruti Suzuki, Power Grid Corp, BPCL, Bharti Airtel and Siemens lost 3-5 percent.
IT stocks ended mostly higher, with Infosys and TCS gaining about half a percent each on optimism over fiscal 2014 earnings. Wipro lost 3.3 percent after the NSE said it will exclude the stock from the Nifty benchmark index with effect from April 1.
Elsewhere, Asian stocks rose broadly, with shares in Hong Kong leading the way as trading resumed for the first time this week. Japanese shares were lifted by a weaker yen as weak GDP data strengthened the case for aggressive monetary easing. The markets in China and Taiwan remained shut for the Lunar New Year holidays.
European stocks were subdued after GDP data from the two largest economies in the Eurozone dented the region's recovery hopes.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.