Equity barometer the Sensex snapped its 11-session winning streak on Monday as it closed in the negative territory on losses led by select index heavyweights including HDFC Bank, Reliance Industries and Infosys.
The domestic market ended lower, mirroring weak global sentiment ahead of key central bank meetings while concerns over global economic growth persisted.
"World shares fell while the dollar firmed on Monday as growth concerns tested investors' mettle ahead of a week brimming with central bank meetings in countries including Norway, Sweden, Switzerland, Britain, the United States and Japan," reported Reuters.
The US Fed meet outcome is due on Wednesday, the Bank of England (BoE) meet outlook will be out on Thursday and the Bank of Japan (BoJ) outcome is due on Friday.
Meanwhile, trading on NSE and BSE will remain closed on Tuesday on account of Ganesh Chaturthi 2023.
Read more: Is stock market closed tomorrow for Ganesh Chaturthi? Here's how to check
Sensex opened 173 points lower at 67,665.58 against the previous close of 67,838.63 and remained in the red throughout the session. The index closed 241.79 points, or 0.36 per cent, lower at 67,596.84.
The Nifty50 index opened at 20,155.95 against the previous close of 20,192.35 and finally ended 59 points, or 0.29 per cent, lower at 20,133.30.
Mid and smallcaps also followed the trend and ended in the red. The BSE Midcap index fell 0.27 per cent while the Smallcap index dropped 0.60 per cent.
Meanwhile, crude oil prices continued their upward march amid tight supply while expectations that the US Fed will not raise rates from the current levels also boosted sentiment. Brent Crude rose about half a per cent to trade above the $94 per barrel mark.
Some 26 stocks ended in the red in the Nifty pack while the remaining 24 clocked gains.
Shares of Hindalco (down 2.19 per cent), HDFC Bank (down 1.93 per cent) and Adani Ports (down 1.80 per cent) ended as the top losers in the Nifty index.
On the other hand, shares of Power Grid (up 3.12 per cent), Titan (up 2.66 per cent) and HDFC Life Insurance Company (up 2.43 per cent) closed as the top gainers in the Nifty index.
Read more: Top gainers, losers today: Power Grid, Titan, Hindalco, HDFC Bank, among most active stocks
Most sectoral indices ended in the red on Monday. However, PSU bank stocks bucked the trend as the Nifty PSU Bank index jumped 3.39 per cent. All 12 components of the index ended with gains, with stocks such as Indian Overseas Bank (up 14.30 per cent), UCO Bank (up 13.37 per cent) and Punjab & Sind Bank (up 10.97) surging over 10 per cent each.
Apart from the PSU bank index, Nifty Auto (up 0.84 per cent), Consumer Durables (up 0.61 per cent), FMCG (up 0.58 per cent) and Oil & Gas (up 0.04 per cent) also closed higher.
On the flip side, Nifty Realty (down 1.37 per cent), Media (down 1.27 per cent) and Metal (down 1.11 per cent) indices ended with significant losses.
The Nifty Bank index closed with a loss of 0.54 per cent while the Private Bank index declined 0.83 per cent.
Vinod Nair, Head of Research at Geojit Financial Services observed that the domestic markets relinquished their momentum as they anticipated a raft of policy rate decisions due this week.
"The investor's confidence was also impacted by the expectations of a demand resurgence in China, combined with crude supply cuts. With the Fed rate hike fears back on the cards, as reflected in the elevated US bond yields, the markets await clarification from major central banks," said Nair.
Shrikant Chouhan, Head of Research (Retail) at Kotak Securities pointed out that the markets finally reversed the 11-session winning streak as profit-taking came into play in banking, realty, IT and telecom stocks.
"Along with concerns over rising global crude oil prices and an uptick in the dollar index and US treasury yields, investors trimmed their exposure ahead of the outcome of the US FOMC meeting on interest rates on Wednesday. Other than global headwinds, higher domestic index valuations after the recent upsurge are making investors nervous, which may lead to some more profit-taking in the near term," said Chouhan.
Kunal Shah, senior technical and derivative analyst at LKP Securities said that the Nifty index has been consolidating within a broad range, with notable call writing activity observed at higher levels. This suggests that market participants are cautious and have been selling call options to hedge against potential downward movements.
"The sideways trend in the index is expected to persist in the upcoming trading sessions. This is attributed to the anticipation of the outcome of the US Federal Reserve (US Fed) meeting, which is a significant event that can impact global financial markets. The index has support at the 20,100 level and resistance at 20,200. A break on either side of this range is likely to lead to trending moves, with potential implications for market direction," said Shah.
According to Deven Mehata, an equity research analyst at Choice Broking, the Nifty has support around the 20,060-19,950 zone.
"Considering the open interest (OI) data, on the Call side, the highest OI was observed at 20,200, followed by 20,300 strike prices while on the Put side, the highest OI was at 20,000 strike price. On the other hand, Bank Nifty has support at 45,600-45,800 while resistance is placed at 46,300-46,500 levels," said Mehata.
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