Sensex falls 298 points, HDFC Bank, SBI down over 2%

Mumbai: The benchmark Sensex settled 298 points lower, dragged by heavweight banks -- State Bank of India and HDFC Bank -- which lost over 2 per cent ahead of the start of the second quarter result season on Thursday.

The Sensex closed 297.55 points lower at 37,880.40 while the Nifty ended at 11,234.55 lower by 78.75 points while the mid and small caps also closed 0.87 per cent and 0.57 per cent lower.

"Market failed to hold its last day gains at the start of the Q2 results. It is expected to trade in a narrow range of 11,300 to 11,100 for Nifty 50 in the very short-term," said Vinod Nair, Head of Research, Geojit Financial Services

He added that the banks underperformed due to concern over slippage and on-going crisis in the sector. The preview analysis of Q2 result is muted due to no real increase in demand and prices, and this may impact the performance during the month.

Globally, most Southeast Asian stock markets closed in the red on Thursday amid
cautious mood as market participants awaited high-level US-China trade talks to begin.