Sensex fails to keep early lead, slumps to three-month low

Stocks saw a positive start on Monday, only to reverse the trend later as the Sensex fell about 144 points to end at an over three-month low, unnerved by muted start to corporate results and a lacklustre global trend.

The numbers from Tata Consultancy Services and Infosys fell short of the crease as investors did not seem impressed.

What clouded sentiment further was US Federal Reserve chief Janet Yellen's commentary on the US economy, indicating the need for aggressive steps to reboot it. The effect was immediate as indices globally started turning weak.

Shares of state-run oil retailers such as Bharat Petroleum, Indian Oil, and Hindustan Petroleum fell after rising over one per cent each in early deals due to an increase in petrol and diesel prices.

Investors are betting on a rise in interest rates by the US Federal Reserve before the end of this year, brokers said, adding that profit-booking only hastened the fall.

The BSE index ended lower by 143.6 points, or 0.5 per cent, at 27,530, its lowest close since July 8. The gauge had edged up 30 points in the last session on Friday.

"Nervous global markets following US Federal Reserve chief 's comments last Friday, and sustained selling by foreign institutional investors last week have pricked sentiment, sparking long liquidation," said Anand James, chief market strategist, Geojit BNP Paribas Financial Services.

Barring banking, all sectors ended lower, with automobile, capital goods, and realty closing down by up to 2.12 per cent.

The NSE Nifty closed lower by 63 points, or 0.7 per cent, at 8,520.4. Intra-day, it shuttled between 8,615.4 and 8,506.

As many as 24 stocks in the Sensex fell and only six rose.

Mahindra and Mahindra was battered the most as it plunged by 3.2 per cent, followed by Hero MotoCorp (2.24 per cent), Asian Paints (2 per cent), HDFC Bank (1.9 per cent), Bajaj Auto (1.8 per cent), Larsen & Toubro (1.7 per cent) and Reliance Industries Limited (1.67 per cent).

Banking shaped up well as concerns about bad loans eased after Russian Rosneft-led group took over private oil firm Essar Oil in an all-cash deal valued at about $13 billion.

ICICI Bank surged the most since March, climbing seven per cent. State Bank of India ended higher by 0.5 per cent.

BSE automobile suffered the most by falling 2.12 per cent followed by capital goods (1.47 per cent), realty (1.19 per cent) and metal (1.19 per cent).

Broader markets put up a similar show, with the mid-cap index falling one per cent and small-cap dropping 0.5 per cent.

Foreign portfolio investors sold shares worth Rs 946 crore on Friday, provisional data showed.

Regional markets were mostly lower, with China's Shanghai Composite falling 0.5 per cent and Hong Kong's Hang Seng 0.8 per cent. Japan's Nikkei rose 0.26 per cent.

Europe was in the grip of weakness as investors remained cautious ahead of corporate results amid speculation about European Central Bank policy as concern resurfaced about the health of the global economy.

London's FTSE declined 0.8 per cent, Paris CAC 40 dipped 0.55 per cent, and Frankfurt's DAX fell 0.54 per cent in early sessions.