The Sensex and the Nifty fell on Monday, marking their lowest close in more than one month, due to profit-taking in stocks heavily owned by foreign investors, ahead of the US Federal Reserve's two-day policy meet starting on Tuesday.
The 30-share BSE index Sensex ended the session down by 65.59 points or 0.23 per cent at 28,437.71 and the 50-share NSE index Nifty fell 14.6 points or 0.17 per cent at 8,633.15.
Among BSE sectoral indices, metal index fell the most by 1.49 per cent, followed by FMCG 0.96 per cent, infrastructure 0.83 per cent and power 0.78 per cent. On the other hand, IT index was the star-performer and was up 1.17 per cent, folllowed by realty 1.15 per cent, TECk 0.52 per cent and consumer durables 0.39 per cent.
Top five Sensex gainers were Infosys 2.28%, Sun Pharma 1.59%, Tata Power 1.57%, BHEL 1.45% and Wipro 1.4%, while the major losers were SSLT 5.16%, Hindalco 3.64%, Bharti Airtel 2.8%, NTPC 2.35% and Dr Reddy's 1.77%.
The 30-share benchmark index has seen selling on rallies after hitting a record high of 30,024.74 on March 4, despite the successful completion of coal and telecom airwave auctions and passing key legislation of insurance overhaul by the Modi government.
Traders worry that Fed Chair Janet Yellen may move towards ending an era of near-zero US rates by removing the word "patient" from a post-meeting comment.
Falls also tracked subdued Asian shares after a downbeat session on Wall Street kept sentiment in check, while the euro recovered from a fresh 12-year low touched on the divergent monetary policy paths between the United States and the euro zone.
"India is relatively better placed to weather any negative Fed meeting outcome but some falls cannot be ruled out," said Deven Choksey, managing director, K R Choksey Securities.
Most of the investors would still be looking to invest in India as inflation and interest rates would remain attractive, he added.
Wholesale prices declined at a much faster-than-expected pace of 2.06 percent on year in February, their fourth straight monthly fall, on the back of plunging global oil prices, government data showed on Monday.
However, data released late on Thursday showed that consumer prices edged up more-than-expected by 5.37 percent in February, marking a third consecutive month of rise.
A report by SMC Investments and Advisors said: "Asian stocks declined led by oil companies as oil continues its slide. US stocks fell on Friday and the Dow and S&P 500 registered a third week of losses as the dollar resumed its climb, adding to worries about its impact on US multinationals' earnings. Producer prices in the US unexpectedly decreased in the month of February, according to a report released by the Labour Department. Although analysts said the drop was primarily due to a quirk in the calculation of margins. The Labour Department said its producer price index for final demand fell by 0.5 per cent in February after slumping by 0.8 per cent in January. The continued decrease by the index came as a surprise to economists, who had expected producer prices to rise by about 0.3 per cent.''
The euro struck a fresh 12-year low on Monday and euro zone stocks reached new peaks on bets that the currency’s relentless fall will boost corporate earning prospects just as the rising dollar hits those of US firms.
European stocks took heart. Germany’s DAX was up 0.85 percent at 12,001 points, France’s CAC 40 half a per cent higher at 5,039 points, and Britain’s FTSE 100 index up 0.25 per cent at 6,758 points.
The FTSEurofirst 300 index of top European shares rose 0.3 per cent to 1,584 points and the euro zone top 50 stocks index was up 0.5 per cent at a seven-year high of 3,673 points.
MSCI’s broadest index of Asia-Pacific shares outside Japan closed a few ticks higher, while Chinese shares outperformed to hit five-year-highs.