Heightened chances of a US rate hike coupled with the upcoming winter session of parliament and derivatives expiry subdued Indian equity markets on Monday.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day's trade marginally in the red. It closed lower by 49 points or 0.19 percent, ahead of an 'unscheduled' US Federal Reserve (US Fed) meeting later on Monday night.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade flat. It closed lower by 7.30 points or 0.09 percent at 7,849.25 points.
The S&P BSE Sensex, which opened at 25,945.14 points, closed at 25,819.34 points -- 49.15 points or 0.19 percent down from the previous day's close at 25,868.49 points.
The Sensex touched a high of 25,958.04 points and a low of 25,747.01 points during the intra-day trade.
Market observers said investors were spooked ahead of the 'unscheduled' US Fed meet, the upcoming winter session of parliament and derivatives expiry later this week.
"Though the US rate hike has been priced-in, there can still be a surprise element coming out of this unscheduled meet. This spooked the investors," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
The US Fed's 'unscheduled' meet is being held to review and determine the advance and discount rates to be charged by the Federal Reserve Banks.
The last such unscheduled meeting was held in 2012, wherein swaplines were discussed.
The meeting assumes significances as it precedes the federal reserve policy meet in December, when a rate hike is expected to be announced.
In the short term, higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.
"There as an anxiety build-up on account of the upcoming winter session of the parliament and derivatives expiry. The two upcoming events caused volatility," James said.
Furthermore, investors were glued to political developments to see whether the government will be able to pass key economic legislation during the winter session that begins on November 26 and will run till December 23.
Last week, the government's efforts to reach out to the opposition before the crucial winter session to get the Goods and Services Tax (GST) bill passed cheered the equity markets.
The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline.
The rupee closed Monday's trade lower by 29 paisa at 66.48 to a US dollar from its previous day's close of Rs.66.19 to a greenback.
Sector-wise, fast moving consumer goods (FMCG), metal and basic metals indices came under intense selling pressure, whereas, consumer durables, automobile and healthcare indices gained during the day's trade.
The S&P BSE FMCG index receded by 93.51 points, metal index declined by 86.08 points and basic metal index was down 10.08 points.
The S&P BSE consumer durables index augmented by 140.25 points, automobile index gained by 127.28 points and healthcare index edged-higher by 79.94 points.
Major Sensex gainers during Monday's trade were Hero MotoCorp, up 2.87 percent at Rs.2,637.25; Gail, up 2.77 percent at Rs.358.45; Bajaj Auto, up 2.22 percent at Rs.2,523.20; Dr. Reddy's Lab, up 1.55 percent at Rs.3,400.95; and Lupin, up 1.43 percent at Rs.1,839.75.
The major Sensex losers were Hindalco Industries, down 3.82 percent at Rs.74.35; Vedanta, down 2.90 percent at Rs.90.45; Tata Steel, down 2.31 percent at Rs.224.40; ITC, down 2.03 percent at Rs.337.40; and Sun Pharma, down 1.07 percent at Rs.718.70.
