A benchmark index for Indian equities, the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange, closed 66 points or 0.23 percent down Monday as stocks of metal, capital goods and fast moving consumer durables (FMCG) companies plunged.
The wider, 50-scrip Nifty of the National Stock Exchange (NSE) too closed the day's trade in the red. It was down 14.60 points or 0.17 percent at 8,633.15 points.
The Sensex, which opened at 28,546.31 points, closed the day's trade at 28,437.71 points, down 65.59 points or 0.23 percent from the previous day's close at 28,503.30 points.
It had touched a high of 28,581.82 points and a low of 28,384.09 points in the intra-day trade.
In Monday's trade metal, capital goods, FMCG, oil and gas and automobile stocks came under heavy selling pressure.
However, healthy buying was observed in information technology (IT), bank, healthcare, consumer durables and technology, entertainment and media (TECK) sectors.
The S&P BSE metal index was down 144.59 points, followed by capital goods index which was lower by 109.85 points, FMCG index declined by 77.83 points, oil and gas index fell by 71.08 points and automobile index decreased by 39.47 points.
The S&P BSE IT index was up 135.43 points, bank index was higher by 53.33 points, healthcare index increased 51.34 points, consumer durables index was higher by 40.19 points and TECK index gained 32.96 points.
Analysts said that the Indian market's were cautious about the US Fed meet which is schedule to be held on March 17 and 18. This meeting will provide the trajectory of the US economy, which will also reveal as to when the rate hike might take place.
The meet also assumes significance as U.S. non-farm payrolls rose 295,000 jobs last month. This data might lead to an increase in US inflation which can make the US Federal Reserve to raise interest rates sooner than previously expected.
With higher interest rates the foreign portfolio investors (FPIs) are expected to be led away from the emerging markets such as India.
"Investors across the world are concerned about the rate hike as it will bring an important change to the cost of liquidity. Hence until this transformation is initiated, volatility cannot be avoided across global equities and currencies," said Vinod Nair, head, fundamental research, Geojit BNP Paribas.
Nair further said that the domestic concerns will remain till important bills like land and coal are passed in the Rajya Sabha.
"Importantly, the risk to pass land bill in the upper house has increased. Opposition having better majority have raised their objection to the bill. Post March 20 the houses will go in recess, hence in the mean-time market can consolidate," Nair added.
Meanwhile, the wholesale inflation data which showed a fall in inflation in February failed to cheer-up the markets. The WPI was down 2.06 percent on the back of the fall in the price of food articles.
Other concerns regarding the marginal increase in the retail inflation for February which belied expectations of a rate cut next month continued.
The Reserve Bank of India is scheduled to announce its first bi-monthly policy review for 2015 on April 7.
The major Sensex gainers on Monday were: Infosys, up 2.28 percent at Rs.2,267; Sun Pharma, up 1.59 percent at Rs.1,028.20, Tata Power, up 1.57 percent at Rs.80.95, BHEL, up 1.45 percent at Rs.258.30 and Wipro, up 1.40 percent at Rs.646.40.
The losers were: Sesa Sterlite down 5.16 percent at Rs.185.50; Hindalco Inds, down 3.64 percent at Rs.126.90; Bharti Airtel, down 2.80 percent at Rs.389.15; NTPC, down 2.29 percent at Rs.155.90; and DrReddy's Lab, down 1.77 percent at Rs.3,313.95.
Among the Asian markets, Japan's Nikkei went down by 0.04 percent, Hong Kong's Hang Seng closed higher by 0.53 percent and China's Shanghai Composite Index, gained by 2.24 percent.
In Europe, London's FTSE 100 was up by 0.50 percent, Germany's DAX Index was also higher by 1.20 percent and France's CAC 40 rose by 0.85 percent at the closing in the Indian markets.
