Sensex falls on global growth concerns; blue-chips lag

MUMBAI (Reuters) - Indian stock markets traded lower on Monday following weaker U.S. markets last week after the Federal Reserve's decision to keep interest rates steady at record lows sparked worries about global growth.

Asian markets fell, but China proved an exception to the downtrend, with the Shanghai Composite index ending 1.91 percent higher.

Business confidence data from China and the euro zone will offer some pointers this week to where the global economy is headed after the Fed kept markets guessing about when it will begin raising rates.

"Investors will find a reason to explain a consolidation or a rise in the market, till we get credible domestic data," G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm said.

 

"The moment you see some comfort on the industrial economy, like industrial output consistently moving above 4.5 percent, some corporate earnings upside, till that time this confusion will go on."

The BSE Sensex was down 0.22 percent, while the broader Nifty fell 0.19 percent, giving up gains of the previous two sessions.

Blue-chips saw some selling pressure. Reliance Industries , down 1.5 percent, was one of the top losers on the NSE. Other blue-chip stocks such as Housing Developing Finance Corp fell 0.85 percent, while ITC lost 0.52 percent.

Pharma stocks were also trading in the red, with Sun Pharma slipping 0.7 percent and Dr Reddy's Laboratories losing 1.14 percent.

Bucking the trend, IDBI Bank rose as much as 11.1 percent following a report late Friday that the government was considering giving more operational freedom to state-run banks.

(Reporting by Karen Rebelo in Mumbai; Editing by Biju Dwarakanath)