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Sensex, Nifty End Lower As RBI Report Drags Banks

Indian shares ended Monday's session lower, with banks suffering heavy losses on the back of weak earnings from ICICI Bank and Kotak Mahindra Bank and the RBI's warning about rising bad loans due to the coronavirus pandemic.

The Reserve Bank of India (RBI) warned in its Financial Stability Report that the gross nonperforming assets (GNPA) ratio of all scheduled commercial banks may increase from 8.5 percent in March 2020 to 12.5 percent by March 2021.

The RBI in its semiannual report further said that the GNPA ratio could rise to 14.7 percent under very severe stress if the macroeconomic environment worsens further.

The benchmark S&P BSE Sensex dropped 194.17 points, or 0.51 percent, to 37,934.73, while the broader NSE Nifty index ended down 62.35 points, or 0.56 percent, at 11,131.80.

ICICI Bank tumbled 6 percent after its quarterly profit missed estimates.

Among other prominent decliners, IndusInd Bank, Axis Bank, HDFC Bank and Zee Entertainment Enterprises lost 3-4 percent.

Yes Bank shares were locked in the 10 percent lower circuit after listing of follow-on public offer shares.

Kotak Mahindra Bank fell over 2 percent after its first-quarter standalone profit declined 8.5 percent amid a rise in NPAs on all fronts on both sequential basis and annual basis.

Asian Paints rallied 3.5 percent after its Q1 earnings exceeded expectations.

IT stocks surged, with TCS, Infosys and HCL Technologies rising 2-3 percent.

UltraTech Cement advanced 2.3 percent ahead of its earnings release.

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