Benchmark share indices extended losses to end nearly 2% down on Monday dragged by financials after the central bank at its mid-quarter policy review on Friday surprisingly hiked repo rate by 25 basis points. Also, weakness in Rupee added to the negative sentiment.
The 30-share Sensex ended down 362 points or 1.8 % at 19,900 and the 50-share Nifty ended down 122 points or 2% at 5,890.
In the broader markets, the midcap index slipped 1.35 and the smallcap index gave off 0.6%, both outperforming the BSE benchmark index which was down 1.8%.
The Rupee remained weak through the day due to month-end dollar demand from importers.
At 1600 hours, the rupee was trading at Rs 62.63 compared with Friday's close of Rs 62.28 per dollar.
Most Asian markets slipped as a soft lead from Wall Street and renewed concerns about the Federal Reserve's policy stance took the shine off an upbeat survey on China's manufacturing sector.
MSCI's broadest index of Asia-Pacific shares outside Japan, up early in the day, was off 0.1%.
However, select markets had significant gains, thanks to a survey that showed a promising pick-up in Chinese export orders, another sign of stabilisation in the world's second biggest economy.
Shares in Shanghai gained 1.3% and Taiwan's main index was up 1%. Japanese markets were closed for a holiday.
European shares carved out minor gains as fresh concerns about the Federal Reserve's policy stance took the shine off an election triumph for Angela Merkel and some upbeat euro zone data.
Merkel's resounding win in Sunday's German elections, seen as a strong vote of support for her efforts in keeping the euro together, was followed by forward-looking euro zone PMI data showing the bloc's economy continuing to pick up pace.
Markit's September Flash Composite Purchasing Managers' Index jumped to 52.1 from last month's 51.5, its highest since June 2011 and beating expectations for 51.9. New orders were at their fastest pace in over two years.
Stock markets finally found direction after a choppy start with gains of 0.2 and 0.3% on Germany's DAX and France's CAC 40 helping lift the FTSEurofirst 300 0.2%.
Sectors and Stocks
Baring Consumer Durables, IT and Teck indices which closed higher by 0.4-2.4%, all the other indices were in the negative.
Rate sensitive like Banks and Realty indices were the worst hit, down 4% each.
Capital Goods, PSU, Power, Oil & Gas, FMCG and Auto indices, too were in the negative, down between 1-3% while Metal index was flat with a negative bias.
Of the 30 stocks on the Sensex, 22 of them closed in the red with losses of atleast 0.7%.
The only gainers in today’s trade were metal names like Sesa Goa and Hindalco up 2-3% along with Coal India, Dr Reddys Lab and Hero MotoCorp up 0.9-1.2%.
IT stocks like Wipro, TCS and Infosys which gained 0.8-1.7%, rounded off the gainers list.
The major losers for the day were SBI, ONGC, ICICI Bank, Maruti Suzuki, L&T, HDFC and BHEL which lost 4-5%.
Tata Power, NTPC, Jindal Steel, Bharti Airtel, HDFC Bank and Tata Steel down 2-3.6% were the other notable losers.
Among other stocks, Denso (India) surged over 6% at Rs 134 after Denso Corporation which made an offer to delist shares of the company received maximum bids at a premium to floor price.
The automotive component maker received cumulative bids for just over 60% of its offer size.
HCL Technologies gained 3% at Rs 1,093, extending its Friday’s nearly 4% rally, after Foreign Investment Promotion Board cleared proposal increase foreign institutional investors investment limit in the company.
The market breadth was negative. 1314 stocks declined while 1000 stocks advanced on the BSE.