State-run banks weigh on India's blue-chip Nifty 50 index

India's blue-chip Nifty 50 closed lower on Monday, weighed down by a slide in state-run banks on fears that newly proposed rules would likely weigh on their profits.

The Nifty 50 NIFTY closed 0.15% lower at 22442.70 points.

However, the 30-member S&P BSE Sensex SENSEX edged 0.02% higher to 73,895.54 as the drop in state-run banks was offset by gains in IT stocks and Kotak Mahindra Bank KOTAKBANK.

The Nifty PSU index CNXPSUBANK, which houses state-owned banks, slid 3.66% after the Reserve Bank of India's draft guidelines on project finance proposed lenders set aside more money for loans to under-construction infrastructure projects.

Analysts said the norms, if implemented, would hurt lenders' margins. Punjab National Bank led losses PNB with a 6.41% drop.

"The RBI's guidelines led to the drop today, but it will have a minimal impact on markets overall, since the weightage of PSU banks is not very high on the index," said Sunny Agrawal, head of fundamental equity research at SBICaps Securities.

The heavyweight financial services index CNXFINANCE closed 0.25% lower, led by a near 9% slide in state-run non-bank lender Power Finance Corps (PFC) PFC.

Helping the financials index was private lender Kotak Mahindra Bank's 5% jump after its fourth-quarter profit beat estimates.

The U.S. rate-sensitive IT stocks CNXIT gained 0.94% after cooler-than-expected U.S. job growth data bumped investor expectations to two U.S. rate cuts this year, from just one cut before the data. (FEDWATCH)

Britannia BRITANNIA surged 6.7%, the most on the Nifty 50, after its fourth-quarter margin growth impressed analysts.

Meanwhile, Titan TITAN slid 7.18%, the most on the Nifty 50, after the jeweller's quarterly profit missed estimates due to bigger discounts amid higher gold prices.

The Adani group's seven-listed firms lost between 0.3% and 4% on the day, continuing their drop from last week after the markets regulator issued them notices of regulatory violations.

The more domestically-focussed small- CNXSMALLCAP and mid-caps CNXMIDCAP shed 1.5% and 0.54% at the close.