* NSE index down 0.31 pct, BSE index 0.33 pct lower
* Financial stocks lead decline
* Some correction in line with Asian markets - analyst
By Aby Jose Koilparambil
Dec 5 (Reuters) - Indian stocks fell on Tuesday, dragged down mainly by financials such as HDFC Bank Ltd ahead of the central bank’s monetary policy decision, while tepid Asian shares also weighed on sentiment.
The Reserve Bank of India is widely expected to keep policy rates on hold, but investors will watch for any hints of a cut at the February meeting, in the policy statement to be released on Wednesday. The central bank kicked off its two-day monetary policy committee meeting on Tuesday.
Sentiment was also lukewarm in other major Asia markets as investors’ rotation out of technology shares took a toll on some of the region’s tech heavyweights.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed with falls in semi-conductor shares getting offset by gains in telecoms and financials. Japan’s Nikkei dropped 0.5 percent, led by declines in high-flying technology shares.
“The market is a little cautious ahead of the RBI policy decision and that’s quite sentimental in nature. There has been some sell-off in the global markets of late, which hasn’t happened in India. So some correction is in line with Asian markets as well,” said Sumit Pokharna, deputy vice president at Kotak Securities.
The broader NSE index was down 0.31 percent at 10,096.95 as of 0553 GMT, while the benchmark BSE index was 0.33 percent lower at 32,761.99.
The NSE index for state-run lenders fell as much as 1.5 percent to its lowest in more than a month, with Bank of Baroda and Bank of India leading the decline.
“Any news on interest rates has direct bearing on financial stocks, impacting everything from yield to cost of borrowing for these financial companies,” said Pokharna.
Almost all sectoral indexes on the NSE and BSE platforms were in the red.
Among gainers, Infosys Ltd extended its rally into a second session, rising as much as 1.8 percent, after the appointment of a new chief executive over the weekend. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu)