The Sensex and Nifty fell in early trade as the indices turned volatile entering the February derivatives expiry week amid bank stocks taking a hit on PNB fraud even as Asian stocks were trading in the green.
While the Sensex was trading 136 points lower 33,874, the Nifty was down 45 points to 10,406 level.
The Sensex fell to an intra day low of 33,842 level, down 221 points.
The BSE bankex resumed its decline and fell 126 points (0.44%) to 28,270 level.
Top loser was the PNB stock, down 5.21% to 119.10 level. Bank of Baroda (2.36%), SBI (1.80%) and Axis Bank (1.32%) were other major losers on the index.
BSE capital goods index was the top loser among the 19 sectoral indices falling 0.89% or 170 points to 19,030 level.
Anand James, chief market strategist at Geojit expects a lesser volatile week ahead. F&O expiry will be in focus as it will be interesting to see how many will be inclined to roll over, given the fiscal end as well as March being a long expiry month.
Nifty stocks will also be in focus following MSCI's thinly veiled response to cut in SGX data feed, added James.
UCO Bank (7.04%), Allahabad Bank (5.48%) and PNB (5.25%) were the top BSE losers.
UCO Bank shares fell after the lender said on Sunday it has $412 million exposure in banking fraud case.
Tata Steel was the top Sensex loser falling 3.28% to 665 level. Bharti Airtel (1.87%) and SBI (1.97%) were other major losers on the index.
On the Sensex, 25 stocks were trading in the red.
Market breadth was negative with 599 stocks rising against 1463 stocks falling on BSE. 102 stocks were unchanged.
The benchmark indices ended lower in a volatile week after showing signs of recovery in the second half amid global markets recovering from the effects of higher US bond yields.
While the Sensex closed 286 points lower to 34,010, Nifty fell 93 points to close at 10,452 points on Friday.
Asian shares gained on Monday, joining a global recovery for equity markets as sentiment improved gradually from a recent shakeout that stemmed from fears of creeping inflation and higher borrowing costs.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, having recovered more than 40 percent of their losses from late last month to last week's low.
Japan's Nikkei gained 1.3 percent.
Trading is expected to be slower than usual due to market holidays in the United States as well as Greater China.
On Wall Street, the S&P 500 rose marginally on Friday to mark its biggest weekly increase in five years, although earlier gains evaporated after a 37-page indictment filed by US Special Counsel Robert Mueller charged 13 Russians and three Russian companies for meddling in the 2016 US presidential election.
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