Benchmark share indices ended nearly 2% down on Monday, amid weak cues from Asia and Europe, with index heavyweight Infosys leading the decline amid reports that the company is under scrutiny from the US Department of Homeland Security for likely errors in employer eligibility documents of its staff working in the United States.
The Bombay Stock Exchange's 30-share Sensex closed at 17,097 down 277 points or 1.60%.
The National Stock Exchange's 50-share S&P CNX Nifty closed down 90 points at 5,201 or 1.71%. The Sensex touched an intra-day low of 17,057 and the Nifty at 5,187.
According to a Reuters, Macquarie's Asia hedge fund has exited its short positions in Indian single stock futures in response to a controversial set of proposed tax rules that could lower investment returns.
Japan's Nikkei share average dipped on Monday after financial leaders' pledge to raise the size of the IMF's firewall failed to ignite risk appetite, and as investors grew cautious ahead of Bank of Japan and US Federal Reserve policy meetings this week. Strait Times, Hang Seng, Taiwan, Kospi and Shanghai ended down between 0.1-2%.
The euro edged down from two-week highs and shares weakened on Monday as political developments in France and the Netherlands raised fears about the region's commitment to tackle its ongoing debt crisis.
CAC, DAX and FTSE have declined between 2-3%.
Back home, on the sectoral front, BSE Realty, Technology, Metal, Capital Goods and Power indices slumped by nearly 3% followed by counters like Banks, Auto, PSU, FMCG and Consumer Durable, all falling down between 1-2%.
In fact, all the major BSE sectoral indices ended in red zone.
Index heavyweight Infosys ended down nearly 4% at Rs 2,406 on reports that the company is under scrutiny from the US Department of Homeland Security (DHS) for likely errors in employer eligibility
Tata Consultancy Services (TCS) dipped almost 3% ahead of Q4 results, schedule to announce today.
From the Realty pack, DLF declined over 4% at Rs 197 after the Bombay Stock Exchange (BSE) has decided to exclude Delhi-based real estate major from its benchmark index Sensex w.e.f June 11, 2012.
In the capital goods segment, BHEL and L&T plummeted between 3-4%.
Banking stocks like SBI and ICICI Bank plunged between 2-3%. SBI ended down by over 3% after the bank said it has decided to reduce lending rates on loans carrying higher interest rates.
Telecom major Bharti Airtel was down by 3.55%.
Auto shares like Tata Motors, Bajaj Auto, Hero MotoCorp, Maruti Suzuki and M&M slipped between 1-2%.
Among Metal segment, Hindalco was the top Sensex loser, down almost 5%. Jindal Steel, Sterlite, Coal India and Tata Steel fell between 2-4%.
On the gaining side, Sun Pharma was the top Sensex gainer, up over 1%. ONGC and RIL gained by nearly 1% each.
The broader indices were equally battered in line with the benchmarks -- BSE Midcap and Smallcap indices were down nearly 2% each.
Share of Kingfisher Airlines tanked almost 10.34% at Rs 16.90 on the Bombay Stock Exchange.
Shares of telecom services providers such as Idea Cellular, Bharti Airtel and Reliance Communications slipped more 4% each on reports that the Telecom Regulatory Authority of India's has recommended a base price for auction of 2G spectrum at about Rs 3,700 crore that is higher than the 3G auction price of Rs 3,500 crore set in 2010.
Shares of paper manufacturing companies rallied on the bourses on back of huge volumes.
West Coast Paper Mills, Andhra Pradesh Paper Mills, Ballarpur Industries and Tamil Nadu Newsprint and Papers ended higher by 4-20% on the Bombay Stock Exchange.
The market breadth ended dismal with 1,801 declining and 989 shares advancing.
