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Benchmark indices extended losses for the third straight session as investors booked profits across the board, amid a sell-off in Chinese shares, with state-owned oil exploration major ONGC leading the decline.
Further, widening current account deficit also weighed on investor sentiment.
A sharp rise in gold imports and a fall in export growth pushed India's current account deficit (CAD) to 2.1% of GDP in the financial year's second quarter, ending September, compared to 1.2%of GDP for July-September 2013.
The 30-share Sensex ended down 322 points at 27,797 and the 50-share Nifty closed down 97 points at 8,341.
In the broader market, BSE midcap and smallcap indices underperformed their larger peers with losses of around 1.5% each. Market breadth in BSE ended negative with 903 declines against 2,040 advances.
Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 4,984.60 crore on Monday, as per provisional stock exchange data.
Buzzing Stocks
All the sectoral indices on BSE closed in red. BSE Power and Metal indices weighed the most with losses of 2.7% each followed by Capital Goods and Consumer Durables indices which lost more than 2% each. BSE Oil and Gas index ended down by 1.5%.
BSE IT and Healthcare indices down by 0.2% each posted the least losses among the sectors.
Sun Pharma gained around 1% after the Competition Commission of India (CCI) approved the proposed merger between Sun Pharma and Ranbaxy, which will result in a combined entity with annual sales worth $4.3 billion, making it the fifth-largest generic drug maker globally.
Mahindra and Mahindra ended with gains close to 1.5%. The company was in news as according to media reports, Mahindra and Mahindra's farm equipment sector is all set to offer an air-conditioned variant for their newly launched Arjun Novo tractor.
Oil and gas shares were under pressure after global crude oil prices fell to a five-year-low on concerns about supply glut. ONGC declined more than 4%. Reliance and GAIL lost around 0.6% and 1% each.
ICICI Bank lost over 1%. Today, the country’s largest private sector bank imposed charges on its own customers for the use of its ATMs for more than five times in a month. SBI, HDFC Bank & Axis Bank have already introduces ATM use charges. Axis Bank and SBI ended down by 1.4% and 2.2% each.
Bharti Airtel lost around 4%. On Monday, Supreme Court (SC) agreed to hear Department of Telecommunications’ plea challenging the restoration of 3G intra-circle roaming pacts by Telecom Disputes Settlement and Appellate Tribunal (TDSAT) which enables telecom companies, like Airtel and Vodafone to offer 3G services even in zones where they do not own 3G spectrums by signing pacts with each other. According to media reports, SC has issued notices to Bharti Airtel, Vodafone and Idea Cellular.
Shares of metal companies were under pressure, falling by up to 5% on China slowdown fears.Sesa Sterlite, Tata Steel, Hindalco Industries, Steel Authority of India (SAIL), Jindal Steel and Power (JSPL) and JSW Steel closed down 2-5%.
Meanwhile, domestic passenger car sales increased 9.52% to 1,56,445 units in November as compared with 1,42,849 units in the year-ago month.Motorcycle sales last month declined 3.05% to 8,53,254 units from 8,80,078 units a year earlier, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
Tata Motors and Maruti Suzuki lost 2.4% and 1.5% each.
BHEL lost around 3%. The company was in news for commissioning a hydro power project in African country Rwanda.
Among other shares, SPML Infra rallied 10% after the company said it has received new orders worth Rs 267 crore and also to raise funds worth Rs 75 crore through qualified institutional placements (QIP).
Global Markets
Chinese stocks were swamped by heavy profit booking. Last week, Chinese markets had surged around 9%. According to a Bloomberg report, a sharp sell-off in riskier debt spread to government notes and stocks after Chinese authorities disallowed the use of lower-rated bonds as collateral for some short-term loans. Shanghai Composite Index closed down 5.4%. Hong Kong shares too witnessed heavy selling and the Hang Seng index closed down by 2.4%.
Nikkei closed 0.7% down, snapping a seven-day winning streak and pulling away from 7-1/2-year highs as a rebound in the yen prompted investors to book recent gains in exporter shares.
European markets were trading lower tracking weakness in Asia. FTSE 100, CAC 40 and DAX indices lost around 1% each in early trades.
