In a session that was marked by fluctuations, the benchmark Sensex ended almost unchanged as it closed in the green for the third consecutive day amid foreign inflows and rising global indices.
But investors were decidedly cautious as the valuation of several stocks appeared stretched in view of the recent rally. They were seen trimming their exposure at existing higher levels, pulling the key indices down from their day's highs.
Buying activity gathered steam at the outset on positive economic data as industrial production expanded at 1.2 per cent in May after a revised reading of -1.3 per cent in April, mainly due to uptick in consumer durable output.
But the worry is retail inflation in June inched up to a 22-month high of 5.77 per cent that restricted the gains, dealers said.
In a volatile trade, the BSE Sensex after opening higher moved up on the back of gains in blue-chips, but in the end, settled at 27,815.18, a measly gain of 7.04 points, or 0.03 per cent.
The gauge had gained 681.24 points in the previous two sessions on sustained capital inflows and extended rally in global markets on hopes that central banks will unleash more stimulus to minimise Brexit damage.
In contrast, the NSE Nifty-50 closed in the red with a fall of 1.55 points, or 0.02 per cent, at 8,519.50.
In the 30-share Sensex universe, 13 added to their gains. Tata Steel stole the show with a gain of 4.47 per cent, followed by GAIL 3.09 per cent, ONGC 3.01 per cent, Coal India 2 per cent, Infosys 1.46 per cent and TCS 1.21 per cent.
TCS is scheduled to report its earnings on Thursday.
Power Grid, Lupin, L&T, Maruti Suzuki, Asian Paints, Tata Motors, Axis Bank, Sun Pharma, M&M and HDFC Bank all went down by up to 2.85 per cent.
The metal index rose the most by climbing 1.83 per cent, followed by IT 0.96 per cent, technology 0.75 per cent, oil & gas 0.36 per cent and PSU 0.28 per cent.
The broader markets displayed a weak trend, with the small-cap index falling 0.82 per cent and the mid-cap 0.55 per cent.
FTIL tanked big-time as it fell 6.04 per cent to close at Rs 85.60 after the Enforcement Directorate arrested its founder Jignesh Shah in connection with the Rs 5,600-crore National Spot Exchange (NSEL) scam.
Shares of NBCC India plunged 10.72 per cent to Rs 229.80 after the Centre today approved 15 per cent disinvestment in state-owned construction firm NBCC, hoping to garner Rs 1,706 crore from the stake sale.
Foreign portfolio investors (FPIs) purchased shares worth a net Rs 212.92 crore yesterday, as per provisional data.
Japan's Nikkei ended 0.84 per cent higher and Hong Kong's Hang Seng gained 0.46 per cent while China's Shanghai Composite rose 0.37 per cent.
Europe was trading in the positive zone, tracking gains across most of Asia. London's FTSE rose 0.19 per cent, Paris' CAC 0.35 per cent and Frankfurt DAX 0.06 per cent in their early session.
In line with equities, the rupee also plummeted by 42
paise, its biggest fall in two weeks, to 66.95 against the dollar (intra-day) at the forex market, fuelling selling pressure in domestic stocks.
Adding to the weakened sentiment, IIP data, released this Monday, showed industrial output in August remained in the negative zone -- the second month in a row, contracting by 0.7 per cent due to a slump in manufacturing, mining and capital goods segments.
Out of 30-Sensex constituents 24 closed today with losses, including Adani Ports, HDFC Ltd, ICICI Bank, RIL, Tata Motors, Bharti Airtel, SBI, Axis Bank, Lupin, Power Grid, Sun Pharma, Bajaj Auto, Hind Unilever, HDFC Bank and NTPC.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 547.26 crore on Monday, showed provisional data.
Among sectoral indices, banking suffered the most by falling 2.19 per cent followed by realty 2.17 per cent, metal 1.91 per cent, consumer durables 1.88 per cent, power 1.85 per cent, healthcare 1.40 per cent and auto 1.31 per cent. While IT index rose 0.18 per cent.
The broader markets too remained under pressure, with the BSE mid-cap index slumping 1.50 per cent and the small-cap index lost 1.41 per cent.
Globally, Asian stocks tumbled for the day with benchmark indices in Hong Kong, Japan and Singapore falling by up to 1.61 per cent.
European markets were also in negative zone with key indices in France, Germany and the UK down by up to 1.14 per cent their in early trade.
