The Sensex closed at its lowest in more than three months on Monday, as investors braced themselves for a tepid quarterly earnings season, amid weakness across global equity markets.
Global equity markets were down on Federal Reserve Chair Janet Yellen's comments on the US economy.
Yellen, in a speech at a conference of policymakers and academics, laid out the deepening concern at the Fed that US economic potential is slipping - and may need aggressive steps to rebuild.
The broader NSE index ended 63 points or 0.73 per cent down at 8,520.40, its lowest close since July 21.
Except banking, all other BSE sectoral indices ended in the red. Among them, auto index fell the most by 2.12 per cent, capital goods 1.47 per cent, realty and metal 1.19 per cent each, while banking index was up 0.5 per cent.
Top five Sensex gainers were ICICI Bank (+6.91%), NTPC (+1.76%), HUL (+0.88%),ONGC (+0.69%) and State Bank of India (+0.48%), while the major losers were M&M (-3.22%), Hero MotoCorp (-2.24%), Asian Paints (-2.07%), HDFC Bank (-1.87%) and Bajaj Auto (-1.8%).
Markets back home were a bit groggy after September-quarter results of Tata Consultancy Services and Infosys - two of India's biggest software exporters - failed to cheer investors.
“Earnings will definitely remain a key trigger for the markets and investors are allocating funds depending on how the earnings will pan out,” said Deven Choksey, managing director at KR Choksey Securities.
This week, companies such as Biocon, Reliance Industries, ACC, Wipro and HCL Technologies are slated to report quarterly results.
Global markets
World stocks started the week in the red on Monday as the dollar touched a 7-month high and US and European government bond yields - the main driver of global borrowing costs - climbed to their highest since June.
European shares fell on Monday as weak-looking business updates from companies such as media group Pearson and Norwegian seafood company Marine Harvest weighed on the market.
Asian shares fell on Monday while the dollar held firm near seven-month high against a basket of major currencies after comments from Federal Reserve Chair Janet Yellen boosted long-dated US bond yields.
A report by SMC Global said: "Asian stocks declined, with the regional benchmark index heading for the lowest in a month, as casino shares tumbled after China detained employees of Australia’s Crown Resorts Ltd. US stocks closed slightly higher Friday, finishing near lows of the session to turn in a second losing week in a row, after a trio of quarterly bank results topped analyst estimates and Federal Reserve Chairwoman Janet Yellen said there may be benefits to running the economy with a tight labour. US business inventories edged up by 0.2 percent in August after coming in unchanged in July. The modest increase matched economist estimates. Retail inventories showed a significant rebound, climbing by 0.6 per cent in August following a 0.2 per cent drop in the previous month."