The Sensex and Nifty extended losses in Monday's trade after the government proposed 10% LTCG tax on equity transactions. Asian markets too were trading lower with all major indices trading in the red, dampening sentiments at home.
The Sensex fell up to 546 points to 34,520 level in early trade but recovered nearly 300 points to trade at 34,828 level , still down 238 points.
The Nifty was trading 85 points lower to 10,675 points. The index fell up to 174 points to 10,586 level.
Experts said the movement of market in second half of the trade will decide its direction tomorrow.
The market also anticipates a hawkish stance from RBI's monetary policy on Wednesday.
On the Sensex, 23 stocks were trading in the red led by YES Bank (3.37%), HDFC Bank (2.89%) and Tata Steel 2.12%.
PC Jeweller which fell up to 60% on February 2 was trading 15.26% higher at 421 level on BSE. Other major gainers on BSE were Bombay Dyeing (8.97%) and United Breweries 7.29%.
Vakrangee Ltd was the top BSE loser falling 10% to 236 level.
Sterlite Technologies (9.93%), SREI Infrastructure (7.70%) were the other losers.
Market breadth was negative with 436 stocks rising compared with 2002 stocks falling on BSE. 106 stocks were unchanged.
Meanwhile, the rupee has opened at 64.20 to the dollar versus its previous close of 64.07.
Asian shares fell the most in over a year on Monday as fears of resurgent inflation battered bonds, toppled Wall Street from record highs and sparked speculation that central While Shanghai SE Composite Index was down 0.03%, Hang Seng fell 1.46% or 479 points.
Nikkei was down 542 points or 2.32%. The Taiwan T Sec 50 index was down 1.58% or 174 points in MOnday tradebanks globally might be forced to tighten policy more aggressively.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.7 percent in the largest daily drop since late 2016.
E-Mini futures for the S&P 500 fell another 0.3 percent, an unusually sharp move for Asian hours and suggesting further losses in US markets later in the session.
Dow futures slipped 0.6 percent while FTSE futures lost 1 percent.
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