The NSE Nifty cracked below the 10,800-mark to hit a low of 10,753.05 intra-day, before closing at 10,762.45 with a loss of 59.40 points, or 0.55 per cent.
Benchmarks buckled under selling pressure on Monday, largely in tandem with a global market sell-off triggered by deteriorating trade relations between the US and China.
The BSE Sensex tumbled over 219 points to close at 35,470.35, while the broader Nifty fell 59.40 points to 10,762.45.
Asian markets were hammered after reports said the US is mulling imposing investment curbs on Chinese companies, building up tensions with Beijing amid an ongoing trade conflict.
Back home, profit-booking and persistent foreign capital outflows added to the sombre mood, brokers said.
After a positive start, the 30-share Sensex advanced to a high of 35,806.97, but soon turned negative and hit a low of 35,430.11.
It finally ended at 35,470.35 -- down by 219.25 points or 0.61 per cent.
On similar lines, the NSE Nifty cracked below the 10,800-mark to hit a low of 10,753.05 intra-day, before closing at 10,762.45 with a loss of 59.40 points, or 0.55 per cent.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,343.44 crore, while domestic institutional investors (DIIs) bought shares worth Rs 1,105.76 crore on Friday, as per provisional data.
Meanwhile, investments through participatory notes into Indian capital markets plunged to over 9-year low of more than Rs 93,000 crore at May-end amid stringent norms put in place by Sebi to check the misuse of these instruments.
“Global trade war concerns and F&O expiry led volatility impacted the market sentiment. Drop in oil prices on account of increase in production will provide some relief to Indian markets in the near term.
“However, any escalation in trade tensions and outflow of foreign funds is likely to add pressure on INR and fiscal path," said Vinod Nair, Head of Research, Geojit Financial Services.
Stocks of state-run oil marketing companies such as HPCL, BPCL and IOC lost up to 3.91 per cent, even as OPEC agreed to ramp up output at its meeting in Vienna, which is likely to cool crude oil prices.
Tata Motors was the biggest loser in the Sensex pack, sinking 5.94 per cent, after the company-owned Jaguar Land Rover unveiled a mammoth Rs 1.2 lakh crore investment plan for the next three years.
Other laggards included ICICI Bank (3.79 per cent), Coal India (2.28 per cent), L&T (2.05 per cent), Axis Bank (1.81 per cent), SBI (1.81 per cent), Hero MotoCorp (1.77 per cent), ONGC (1.72 per cent), PowerGrid (1.44 per cent) and Adani Ports (1.38 per cent).
It major Infosys bucked the trend, spurting 2.07 per cent in a weak market.
Vedanta, Kotak Bank, IndusInd Bank, HDFC Bank and TCS also finished with gains.
Sector-wise, the BSE PSU index bled the most, down 1.73 per cent, followed by oil and gas (1.55 per cent), auto (1.51 per cent), infrastructure (1.32 per cent), capital goods (1.31 per cent), realty (1.24 per cent), power (1.02 per cent), metal (0.98 per cent) and bankex (0.94 per cent).
IT and teck, however, ended in the positive zone, rising by up to 0.85 per cent.
In keeping with the overall trend, the BSE small-cap and mid-cap indices declined by 0.89 per cent and 0.80 per cent, respectively.
Globally, Japan's Nikkei ended lower by 0.79 per cent, Shanghai Composite Index tumbled 1.05 per cent and Singapore lost 0.81 per cent. Hong Kong's Hang Seng shed 1.29 per cent.
In the Eurozone, Frankfurt's DAX fell 1.09 per cent and Paris CAC 40 was down 0.82 per cent in their late morning deals.
London's FTSE too declined 1.22 per cent.
Photograph: Shailesh Andrade/Reuters