Sensex and Nifty closed over 1.6% lower each Monday, backed by weak global equities amid rising number of cases of COVID-19 in India and globally.
Reversing Friday's gains, Sensex ended 552 points lower at 33,228 and Nifty closed 159 points lower to 9,813.
IndusInd Bank, followed by Tata Steel, Bajaj Finance, ICICI Bank, Axis Bank, NTPC, SBI, HDFC Bank and SBI were among the top laggards in the Sensex pack. On the other hand, Sun Pharma, Infosys, Nestle India and Asian Paints were among the top gainers.
Banking stocks led the losses with Bank Nifty falling 3.59% or 741 points to 19,912.
Apart from banking, realty, IT, auto and metal stocks also ended lower for the day. On the contrary, PSU Bank, pharma and media ended marginally higher today.
Domestic markets started the week on a bearish note on Monday, in line with Asian counterparts and weak oil prices amid concerns of a rise in domestic coronavirus cases and the second wave of coronavirus arising out of Beijing.
Further, foreign fund outflows, weak economic data and currency hitting 76 per dollar mark also kept demand for equities lower as investors focused on risk-averse assets.
The annual rate of inflation based on monthly wholesale price index (WPI) contracted 3.21 per cent for May 2020 as compared to 2.79 per cent during the corresponding month of the previous year.
Countering Wall Street, Asian counterparts traded on a bearish note today, as entiments were pessimistic over the fears of the second wave of coronavirus.
Globally, markets have given up gains from last week to trade bearish, with signs of the deadly disease resurging in the United States, as investors' optimism over economic recovery is beginning to fade again.
Vinod Nair, Head of Research at Geojit Financial Services said, "The infections are still high in India while there seems to be a resurgence of virus cases in China and the US. FII net inflows into equity were also negative over the previous 2 trading sessions, which could be a signal of reduced risk appetite."
Ajit Mishra, VP-Research, Religare Broking said, "In line with the benchmark, mostly sectoral indices struggled in today's trade and ended in the red. However, market breadth was almost flat, thanks to resilience in smallcap front."
With China reporting the second wave of Covid-19 hitting Beijing, oil prices have fallen. Oil benchmark Brent crude futures today fell 2.01% to $37.95 per barrel.
Technical indicators suggest that markets may see further consolidation and Nifty index could range between 9,600-10,300.
Expressing views over Nifty's near term technical outlook, Rohit Singre, Senior Technical Analyst at LKP Securities said, "For coming session, support for Nifty is coming near 9730-9675 zone and resistance for index is coming near 9930-10000 zone, index is in consolidation mood and the overall range would be 9500-10000 zone and final direction will be clear only when we see an either side breakout from the given range in index."
Meanwhile, companies set to announce their earnings are Tata Motors, Can Fin Home, JK Tyre, Shalby, Shoppers Stop and Ramky Infra among others.