The benchmark share indices ended over 1.6 per cent down on Monday, amid weak global cues, weighed down by selling in bank shares after an RBI panel proposed strict norms for loan restructuring. The Sensex slipped 281 points or 1.6 per cent to close at 16,877 and the 50-share Nifty plunged 87 points or 1.7 per cent to close at 5,118 levels.
The European markets were also trading on a weak note. CAC 40, DAX and FTSE slipped 1.5 per cent each after two Spanish regions said they would need aid, reigniting fears the country will become the fourth euro zone member to need a full international bailout.
The Asian markets closed lower on continued fears regarding Greece and Spain. Nikkei slipped nearly 2 per cent or 161 points to 8,508, Hang Seng plunged 3 per cent or 587 points to close at 19,053 and the Shanghai Composite dipped 1.3 per cent to 2,141 levels.
Back home, Maruti Suzuki was the top loser among the Sensex stocks, down 5.5 per cent to end at Rs 1,081 after the country's largest car maker declared a lockout at its Manesar plant, which accounts for about 40 per cent of its total capacity. It has ruled out restarting production until a probe is completed into rioting that led to the death of a manager.
Metal stocks such as Tata Steel, Jindal Steel Hindalco, Jindal Steel and Sterlite Industriels edged lower by 4-5 per cent each on concerns of a dip in demand from China. LMEX, a gauge of six metals traded on the London Metal Exchange (LME) fell over 2 per cent on Friday. On the domestic front, the iron ore export slumped to multi-year low in April-June.
BHEL, GAIL, Tata Motors, Bharti Airtel, ICICI Bank, Bajaj Auto, State Bank of India, Wipro, Tata Power, HDFC Bank Coal India and Sun Pharma also closed weaker by 1.5-4 per cent each in trades on Monday.
Infosys ended down 1.4 per cent on profit booking at higher levels after recent gains last week. FMCG major ITC ended down 1.3 per cent ahead of its first quarter earnings during the week.
Larsen and Toubro ended down 1.1 per cent. The engineering major reported 300 bps decline in EBITDA (earnings before interest, taxes, depreciation and amortization) margins to 9.09 per cent for the quarter ended June 2012, against 12.11 per cent in year ago quarter.
On the other hand, Dr Reddy's Labs and Cipla were among the notable gainers. All the sectoral indices ended lower in trades today. The BSE metal index was the top sectoral loser. The index fell 3.35 per cent or 357 to shut shop at 10,316 levels. Realty, power, auto, capital goods, bankex, consumer durables and PSU indices also closed lower by 1.6-2.9 per cent each.
From the realty space, HDIL was the top loser, down 7 per cent to Rs 76. Unitech, Indiabulls Real Estate, DLF, Sobha Developers, Phoenix Mills and Godrj Properties also closed lower by 2-4 per cent each.
Shares of companies engaged in the retail business were under pressure on bourses in trades today on reports that the Samajwadi Party (SP), Left parties and JD(S) have asked Prime Minister Manmohan Singh not to allow foreign direct investment (FDI) in multi-brand retail.
Reliance Communications (RCom) ddipped 3 per cent at Rs 61.30 after the Anil Ambani-promoted telecom firm said that it has put on hold the initial public offering (IPO) of its undersea cable unit, Flag Telecom, in Singapore due to adverse market conditions.
Geometric Limited jumped over 8 per cent to Rs 78.80 after the mid-cap IT firm reported 76 per cent year-on-year (y-o-y) jump in consolidated net profit at Rs 20.66 crore for the quarter ended June 2012 on back of robust operation income. Income from operations grew 51 per cent at Rs 261 crore on y-o-y basis.
Zee Entertainment Enterprises ended higher by 3 per cent at Rs 155, also its highest level since September 2009, in an otherwise weak market on reporting 21 per cent year-on-year growth in consolidated net profit at Rs 157 crore (Rs 1.57 billion) for the quarter ended June 2012.
The broader markets ended on a weak note. The BSE mid-cap index slipped 1.3 per cent or 80 points to close at 6,103 and the small-cap index slipped 76 points to end at 6,599.
The overall breadth was extremely negative as 1,794 stocks declined while 990 advanced.