Mumbai: Indian markets fell marginally on Tuesday, with falling for fourth consecutive sessions led by private banks after HDFC Bank reported weaker asset quality and slowdown in retail loan growth.

At 9.37 am, the benchmark Sensex index fell 0.2% to 37953.78 while Nifty lost 0.24% or 27.15 points to 11319.05.

Losses in private banks were also after Reserve Bank of India (RBI) governor said it is seeing signs of fragility in some lenders. The RBI is monitoring non-banking finance companies amid signs of stress to prevent another potential surge in soured debt. Since last week analyst were cautious due to higher taxes on wealthy and few foreign funds in budget.

Of the seven Nifty companies that have announced earnings so far, five have either met or exceeded analyst estimates.

HDFC Bank Ltd fell another 2% while HDFC Ltd down 2.1%. According to Prabhudas Lilladher report HDFC Bank escalated provisions on certain segments of unsecured retail & housing finance companies and non banking finance companies along with other sectors on caution from slowing economy.

Bank cautiously has slowed parts of retail (especially unsecured) to take cognizance of slowing economy and the same also has slowed certain segments of retail (vehicle/business banking). Wholesale loans also saw slower growth on repayments and run-off in short term loans. Hence overall loan grew only by 17.0% year on year. Slippages continued from Agri which bank has been highlighting from a few quarters now deteriorating asset quality ratios but otherwise (ex-Agri) has been stable at 1.17% from 1.14% in last year same quarter, Prabhudas Lilladher report added.

"Market entered into a bearish phase as investors turned sellers due to concerns over extension of economic slowdown and weak corporate earnings hurting the sentiment. This correction has expanded to large caps which until now were attracting FII inflows, but concerns over tax and muted Q1 results will continue to impact", said Vinod Nair, Head of Research, Geojit Financial Services.

Yes Bank fell 2.6% to 88.75. Its promoter Rana Kapoor has pledged nearly 100 million shares. The pledge was made as security provided to the holders of debentures issued by Morgan Credits (MCPL). Morgan Credits also pledged 7.02 crore shares, accounting for 3.03% of the total share capital.

TVS Motor Co Ltd fell 4% to 365 after the company reported a 5.5% decline in consolidated net profit at 151.24 crore for the first quarter ended 30 June.

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