The Sensex and the Nifty gave up early gains and ended nearly half a per cent lower, marking their biggest single-day loss in two weeks, after a government official fanned doubts that the Goods and Service Tax (GST) Bill was unlikely to be cleared in the current session of Parliament.
A senior Finance Ministry official told NewsRise that the Government was not hopeful of the passage of the GST Bill in the ongoing monsoon session.
With only three days left for the session to end, investors were hopeful of Parliament passing of the country's most ambitious tax reform in decades.
Domestic sentiment was also dampened as the Land Bill has been deferred till next Parliament session as no consensus has been reached on controversial clauses.
The contentious Land Acquisition Bill will not come to Parliament before the Winter Session, with the Joint Committee of Parliament examining the measure today deciding to seek more time to finalise its report after Congress and TMC sought more time to study certain clauses.
The 30-share BSE index Sensex was down 134.67 points or 0.48 per cent at 28,101.72 and the 50-share NSE index Nifty was down 39 points or 0.46 per cent at 8,525.60.
Among BSE sectoral indices, infrastructure index fell the most by 1.08 per cent, followed by metal 1.04 per cent, oil & gas 0.94 per cent and consumer durables 0.92 per cent. Only realty index was up 0.83 per cent.
Top five Sensex gainers were BHEL (+2.01%), Hero MotoCorp (+1.67%), Maruti (+1.03%), GAIL (+0.79%) and TCS (+0.75%), while the major losers were ONGC (-2.55%), M&M (-1.96%), NTPC (-1.91%) and Tata Motors (-1.71%) and Coal India (-1.59%).
Earlier in the day, the 30-share BSE index Sensex jumped 171.38 points or 0.61 per cent to a 2-1/2 week high of 28,407.77 after moving in a range of 28,417.59 and 28,228.27.
Similarly, the 50-share NSE index Nifty at one point rose 40.85 points or 0.48 per cent to 8,605.45 after moving in a range of 8,621.55 and 8,564.45.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 93.74 crore last Friday, as per provisional exchange data. Domestic institutional investors (DIIs) bought shares worth Rs 34.08 crore.
Disappointing economic data out of China failed to derail European equities on Monday, with the markets opening in positive territory and traders citing a catch-up rally after underwhelming US jobs data on Friday.
There was also more optimism over Greece as official comments pointed to a speedy wrap-up to bailout talks designed to save the country from financial ruin.
The FTSEurofirst 300 index was up 0.3 per cent at 0709 GMT, with benchmark indexes in Paris and Frankfurt up around 0.5 per cent.
Asian shares edged up but held near 1-1/2 year lows after Chinese data highlighted a deepening slowdown in demand in the world's industrial powerhouse.
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