Sensex, Nifty in weak territory on unfavourable cues from global markets.
S&P BSE Sensex ended at 26,481 down by 42 points or 0.16% while the CNX Nifty was able to maintain its crucial level of 8,000 at 8,022 down by 22 points or 0.27%.
The broader markets, however, underperformed their larger counterparts with BSE Midcap and Smallcap indices down by 0.3% each.
The market breadth is weak with 1,575 declines against 1060 advances on the BSE.
Further, foreign institutional investors were net sellers in Indian equities worth Rs 749 crore on Monday, as per provisional BSE data.
"Market continues to be above the crucial level of 8000 ahead of MSCI's decision on whether to include China A shares in the EM index. This will be decisive in telling us if the market is likely to breach to lower levels," said Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services in a post market note.
"That said, our market is yet to rationalize on FY16/17 earnings growth expectation post a disappointing FY15 and government spending still abating us. However, the bull market is still intact and this is a good time to be in consolidate and strategy should be to add on dips as support evolves in the global and domestic market," he adds.
According to KK Mital, Managing Director, Globe Capital,"Nifty is consolidating at the levels of 8,000 with a negative bias. Banks were up largely because of introduction of new norms for lenders by the RBI whereby the strategic restructuring will allow lenders to convert dues into equity shares in order to recover debt. There was some sort of relief in the banking sector."
Meanwhile, according to Moody's, a weak monsoon is likely to be credit-negative for India as it is expected to push up food inflation as well as government deficits.
Further, IMD has revised its monsoon forecast for 2015 from below normal to deficit.
On the currency front, at 3:45PM, the rupee was quoting at 63.89, appreciating by 19 paise amid fresh dollar selling by exporters and banks.
Sectors and stocks
On the sectoral front, BSE Healthcare index was the highest loser as it slid by 1.5%.
Among the rate-sensitive sectors, realty and auto indices were down by 1.3% and 0.7%, respectively while Bankex was up by 0.3%.
Consumer Durable index was the top gainer up by nearly 1.1%, followed by Metal Index, up by 0.6% Vedanta surged over 3% and was the top gainer on the Sensex.
Cairn India is likely to merge with Vedanta, which will give a debt-heavy Vedanta an access to Cairn India’s cash.
The fear of a possible merger has affected Cairn India, a listed oil and gas producing company whose shares dipped over 4.5% on the BSE.
Trade unions representing workers of Tata Steel in the UK will go on strike on June 22 over proposed changes to the company's pension scheme.
Shares of Tata steel advanced marginally on the Sensex and gained 0.6% on account of profit –booking. Banking shares gained ground after the central bank in an announcement today, allowed banks to take control of debt-laden companies by converting loans into equity, if a debt restructuring fails to revive them within a stipulated timeframe.
Shares of Axis Bank, ICICI Bank, and SBI have gained between 0.5-1.1% each on the Sensex.
HDFC was up nearly 1% on BSE after the largest mortgage lender approved fund-raising worth Rs 5,000 crore simultaneously by secured redeemable non-convertible debentures (NCDs) and warrants. Other notable gainers are Hindalco, Hindustan Unilever, Tata Motors, all gaining more than 1.5% on the Sensex.
On the flip side, Cipla was the top loser on the Sensex after shares of drug maker have dropped 2.2% and on worries of earnings been affected after its peer Mylan launched an asthma drug in UK which was earlier expected to be launched by Cipla.
IN the IT sector, Wipro was down nearly 2% while TCS and Infosys shed 0.8% and 0.4% respectively.
Other major losers on the Sensex included Wipro, ONGC, Bajaj Auto, and Sun Pharma, all shedding between 1.1-1.6% each.
Among other shares, Sun TV bounced back partially and gained 4.3% on the Sensex, a day after the stock tanked 22% on reports that the Ministry of Home Affairs (MHA) refused to give security clearance to its 33 television channels.
Shares of Nestle India soared over 7% on the Sensex after media reports suggested that the controversial Maggi noodles that are manufactured in India adhered to the food safety norms of Singapore.
Global markets
European shares are trading lower tracking losses in the Asian stocks as speculation intensified that the US Federal Reserve could raise interest rates sooner than many expect, though this failed to give the dollar a significant boost.
MSCI's main index of Asia-Pacific shares outside Japan shed 0.9% to a fresh 10-week low.
Chinese shares eased after soft inflation data suggested the economy was still struggling, even though Beijing is expected to add more policy stimulus.