The Sensex and Nifty closed lower in trade today on losses in banking, auto and capital goods stocks. Weak sentiments in global markets also affected trading at home on fears of a slowdown in the global economy after eurozone factory output fell at the fastest rate in almost six years.
While the Sensex fell 355 points to 37,809 with 24 components in the red, the Nifty ended 102 points lower to 11,354.
ONGC (3.90%), Coal India (2.09%) and PowerGrid (1.56%) were the top Sensex gainers. Top Sensex losers were Vedanta (3.28%), Tata Motors (2.31%) and YES Bank (2.18%).
On Friday, the 30-share index closed at 38,164.61, down by 222.14 points, or 0.58 per cent.The NSE Nifty shed 64.15 points, or 0.56 per cent, to end at 11,456.90.
"The equity markets reacted to negative global cues which were reflected with an inverted curve in the US Bond markets and the German Bunds entering into negative territory indicating a fair probability of global recessionary conditions. Couple that up with the uncertainty related to Brexit which can cause upheaval in risk-on assets/currencies and the possible outcome associated with our general elections added to the pressure the markets were facing.
So, the markets shall be taking cues from the aforementioned factors and a pragmatic approach would be to have a diversified investment strategy with a bias towards quality and a systematic and staggered rationale to reduce one's impact cost that may arise from the volatility," said Mayuresh Joshi, Portfolio Manager at Angel Broking.
Meanwhile, the mid cap and small cap indices closed 160 points and 171 points lower on BSE.
Market breadth was negative with 792 stocks closing higher compared to 1884 falling on the BSE. Banking, auto and capital goods stocks led the losses with their BSE indices falling 426 points, 209 points and 145 points, respectively.
Vivek Ranjan Misra, Head of Fundamental Research at Karvy Stock Broking said, "After a period of strength, markets have turned weaker, largely due to a couple of events. Firstly a dovish Fed and secondly inversion of the US yield curve using 10Y- 3 Month has led fears of a global recession to resurface.
High valuations of stocks leave very little room for disappointment. However, we believe that while data is consistent with a slowdown, but a recession is unlikely in the near future and equities should bounce back over the next two or three months".
On a net basis, foreign portfolio investors (FPIs) bought shares worth a net of Rs 1374 crore on Friday , and domestic institutional investors (DIIs) were net sellers to the tune of Rs 675 crore, provisional data available with BSE showed.
Shares were sharply lower in Asia on Monday after Wall Street ended last week with a broad retreat. Japan's Nikkei 225 stock index tumbled 3.2 percent to 20,930.27, while the Shanghai Composite index declined 1.1 percent to 3,072.06.
The Hang Seng in Hong Kong lost 1.8 percent to 28,583.60 and South Korea's Kospi declined 1.7 percent to 2,149.39. The S&P ASX 200 gave up 1.2 percent to 6,120.60. Growth concerns were revived by weak factory data from Europe. Investors are awaiting China-U.S. trade talks that are due to resume Thursday in Beijing.
Edited by Aseem Thapliyal