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Banks drag Sensex, Nifty lower as China tensions, Fed weigh

FILE PHOTO: People walk past the Bombay Stock Exchange (BSE) building in Mumbai, India, March 9, 2020. REUTERS/Francis Mascarenhas/File photo

BENGALURU (Reuters) - Indian shares closed lower on Thursday, weighed down by banking stocks, as China tensions remained in focus and the lack of new stimulus measures from the U.S. Federal Reserve further disappointed stock markets.

The blue-chip Nifty closed 0.76% lower at 11,516.10, while the benchmark Sensex ended 0.82% lower at 38,979.85.

Indian and Chinese border troops exchanged intense gunfire last week just days before their foreign ministers met, Indian officials said on Wednesday.

Global markets were also down, with European, Asian stocks and U.S. S&P 500 futures falling 1% after the Fed pledged to keep interest rates low for a long time but stopped short of offering further on stimulus for the U.S. economy.

In Mumbai, the Nifty Bank Index closed 1.12% lower, with HDFC Bank Ltd ending down 0.9%, among the top drags on the Nifty 50.

Conglomerate Reliance Industries Ltd was the biggest drag on the Nifty, ending 1.1% down after hitting a record high in the previous session.

Pharmaceutical and IT stocks were among the few that closed in the black, with the Nifty Pharma Index gaining 0.41% and the Nifty IT index closing 0.24% higher.

Dr.Reddy’s Laboratories Ltd closed 4.3% higher at a record high. On Wednesday, Russia’s sovereign wealth fund said it would cooperate with the company to test and supply Russia’s Sputnik-V COVID-19 vaccine in India.

Technology firm Happiest Minds Technologies Ltd more than doubled in value in its stock market debut, underscoring strong investor interest in IT services firms during the COVID-19 pandemic.

Reporting by Anuron Kumar Mitra in Bengaluru; Editing by Ramakrishnan M.