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India's Nifty 50 and Sensex fell on Monday after rallying to record highs for most of this month as high-weightage banks took a breather following a recent rise.
The benchmark NSE Nifty 50 index lost 0.18 per cent to 21,418.65 points, while the S&P BSE Sensex settled 0.24 per cent lower at 71,315.09.
Banks and financials lost 0.57 per cent and 0.39 per cent, respectively, after rising about 2 per cent each in the last two sessions. Financial services is the heaviest sector in the Nifty 50 index.
ICICI Bank and IndusInd Bank dropped 1.5 per cent and 1 per cent, respectively, and led the losses in the Nifty 50.
Information technology stocks, the second-heaviest sectoral index, shed 0.27 per cent. It snapped a two-session rally, where the index rose about 8 per cent.
IT companies, which earn a significant share of their revenue from the US, jumped last week after the US Federal Reserve's policy commentary raised hopes of a rate cut in the first half of 2024.
The more domestically-focussed small- and mid-caps gained 0.22 per cent and 0.56 per cent, respectively, outperforming the blue-chips.
"Large-caps offer better risk-reward balance given more reasonable valuations compared to lofty valuations of most small- and mid-cap stocks," said analysts at Kotak Securities.
Small- and mid-caps have added 54 per cent and 45 per cent in 2023 so far, compared to an 18.30 per cent rise in the Nifty 50 index.
The Nifty and Sensex have gained about 6.5 per cent each so far this month and are set for their best monthly performance in 2023, aided by foreign inflows, strong macroeconomic data, moderation in crude oil prices and easing global interest rate outlook.
India's sugar companies like Dwarikesh Sugar, Shree Renuka Sugars and Balrampur Chini Mills jumped between 2 per cent and 5.5 per cent on the government's plan to allow sugar mills to dilute up to 1.7 million metric tonnes of sugar for ethanol production.
Zydus Lifesciences surged 5.37 per cent to hit an all-time high after receiving the US drug regulator's approval for key drugs.
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