Heightened chances of a US rate hike, coupled with slow progress in passing a key economic legislation by the Indian Parliament, subdued Indian equity markets, leading a barometer index to shed 106 points or 0.42 percent during the late-afternoon trade session on Monday.
Initially, both the bellwether indices of the Indian equity markets opened higher in sync with their Asian peers which firmed-up following Friday's positive close for the US markets.
However, the initial gains were capped following a healthy growth in a key US data - the non-farm payroll figures which were release on Friday.
The data showed that the US economy created 211,000 jobs last month against expectations of 200,000.
The data assumes significances as it heightened the chances of a US rate hike slated for mid-December.
A US rate hike could potentially lead to a massive pullback of foreign funds from emerging economies like India.
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The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) shed 106 points or 0.42 percent during the late-afternoon session.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the red. It was lower by 14.10 points or 0.18 percent at 7,767.80 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,746.03 points, was trading at 25,531.63 points (at 2.45 p.m.), down 106.48 points or 0.42 percent from the previous day's close at 25,638.11 points.
The Sensex so far touched a high of 25,785.53 points and a low of 25,477.69 points in the intra-day trade so far.
Markets observers elaborated that a healthy US non-farm payrolls data coupled with parliament's logjam depressed investors.
"Friday's better-than-expected US jobs data has heightened the rate hike chances and with no fresh triggers the markets are trading lower," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"Further, the parliament's logjam has reduced the chances of goods and services tax (GST) bill getting passed this session. This has been a major dampener for the markets."
Sector-wise, healthy buying was observed in healthcare, banking and consumer durables sector, while selling pressure was seen in fast moving consumer goods (FMCG), metal and oil and gas sectors.
The healthcare index augmented by 128.51 points, banking index gained by 72.78 points and consumer durables index was higher by 28.93 points, while the FMCG index plunged by 205.77 points, metal index receded by 55.50 points and oil and gas index declined by 31.79 points.