MUMBAI: Indian shares slipped on Thursday with lenders such as HDFC Bank and ICICI Bank falling on caution ahead of the expiry of derivative contracts and release of September-quarter gross domestic product data later in the day.
Sentiment was further weighed down by declining Asian shares, which were hit by a plunge in high-flying technology companies, with MSCI's broadest index of Asia-Pacific shares outside Japan down as much as 1.41 percent.
Domestically, investors were wary ahead of the GDP data, with analysts expecting growth to have picked up as businesses started to overcome teething troubles after the launch of a national sales tax and the ban on high-value banknotes last year.
Some volatility was also anticipated ahead of the expiry of monthly derivative contracts at the end of the session.
"Markets are at quite a high level in terms of valuations; so some amount of correction is normal to expect," said Deepak Jasani, head of retail research at HDFC Securities.
The broader NSE Nifty was down 0.82 percent at 10,276.20 as of 0617 GMT, and set to post its fourth monthly loss this year.
The benchmark BSE Sensex was 0.90 percent lower at 33,300.68, but was on track for a second straight monthly gain.
HDFC Bank fell 0.9 percent after gaining in the last four sessions while ICICI Bank Ltd slipped more than 1 percent. The Nifty bank index was down 1 percent, on track for a third session of losses.
The Nifty PSU bank index fell for the third straight session, losing as much as 1.4 percent, with State Bank of India down 1.8 percent.
PSU banks seem to be under pressure as the likelihood of interest rates falling further from current levels has been postponed, Jasani said.
Among gainers, Indiabulls Housing Finance Ltd rose as much as 1.9 percent, after rating agency CRISIL upgraded the lender's long-term rating on Wednesday. The stock is on track to post its fifth straight session of gains.