Markets ended marginally in red as investor sentiments remained subdued due to weak macro-economic situation coupled with global growth woes.
The Sensex ended at 18,438 down 12 points. Nifty ended down 10 points at 5,542.
On the global front, the yen tumbled and Japanese stocks soared on Monday as the Bank of Japan lost no time embarking on its ambitious stimulus drive, but US weak jobs data and regional risks such as the bird flu and North Korea weighed on other assets.
The Nikkei surged 2.8% at 13,193. Hang Seng and Taiwan Weighted however shed 0.6-2.3% each.
The BOJ conducted its first government bond buying operation on Monday since announcing monetary easing on a stunning scale, saying it will buy one trillion yen of Japanese government bonds of between five and ten years maturity, and 200 billion of bonds with maturities exceeding 10 years.
Foreign funds sold shares worth Rs 8.97 billion in previous three sessions, provisional exchange data showed. Fourth quarter earnings season, which begins with Infosys results on Friday will decide the market trend going ahead.
Industrial production numbers, which is due on Friday, may also have some impact on the trading sentiment this week as IIP data is likely to be a key input for RBI's next policy review on May 3.
Reserve Bank of India Governor D. Subbarao said Saturday, 6 April 2013, said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission.
The Reserve Bank of India (RBI) will announce the Monetary Policy Statement 2013-14 on 3 May 2013.
The RBI cut its key policy rate viz. the repo rate by 25 basis points to 7.5% after a mid-quarter monetary policy review on 19 March 2013.
Back home, the rupee continued to rule firm against the American currency and was quoted at 54.59 per dollar on selling of dollars by banks and exporters.
BSE IT index slipped 1% at 6,665. The firm rupee has taken IT shares down as US is one of the key markets for Indian IT firms.
BSE Capital goods, metal and bankex were down 0.6-0.8% each.
Meanwhile, buying interest can be seen in consumer durables and healthcare shares.
Both indices gained around 1% to 7021 and 8266, respectively. Oil & gas, power and realty shares are also in the positive zone.
"Among the frontliners, oil & gas sector looks attractive with Reliance Industries and ONGCa s our top pick. We also like Cipla, Tata Global Beverages and cement counters such as Ambuja and UltraTech," said Kunal Bothra, Technical Analyst, LKP Securities.
Bharti Airtel surged 4% to Rs 281. Cipla, Dr Reddy's and Sun Pharma were up 1-2% each. Shares of Bharti Airtel and Idea Cellular gained up to 6% after the Supreme Court allowed the third-generation (3G) roaming pact till April 11.
BHEL has jumped 2.6% at Rs 182 on news that the company's turnover increased to Rs 50,015 crore during 2012-13 from Rs 49,510 crore in the previous fiscal.
However, the state-owned power plant equipment manufacturer posted an 8% drop in net profit for the quarter ended March 2013.
It was Rs 6,485 crore as against Rs 7,040 crore in the year-ago period.
Reliance Communication (RCom) added 4.5% at Rs 66 on BSE on reports that the telecom services provider is planning to sell its majority stake in its subsidiary Reliance Globalcom to Bahrain Telecommunications Company for Rs 6,000 crore.
Maruti Suzuki, India's largest passenger car manufacturer, witnessed profit-booking in early trades but managed to recover most of it.
Last week, weakened yen on the back of Bank of Japan's stimulus announcements, had boosted sentiments in Maruti's shares as the counter jumped over 7% to close above Rs 1,400.
Shares of Maruti were up 0.7% at Rs 1417.
Wipro shed 1.4%. Sterlite, TCS, Larsen & Toubro and HDFC were down 1.5-2% each.
Bank of Baroda declined 1.7%. The bank has decided to revise interest rates on some term deposits of less than Rs 1 crore with effect from 6 April 2013.
Ashok Leyland fell 0.5%.
The company reported a 2% decline in total sales at 14,020 units in March 2013 over March 2012.
On the other hand, TVS Motor Company zoomed nearly 10% to Rs 39.85 after the two-wheeler manufacturer said that its has signed agreement with BMW Motorrad forces to develop and produce a new series of motorcycles.