Reversing its early gains, benchmark BSE Sensex plunged by 571 points or nearly 1 per cent at close on Monday following losses in banking, oil, FMCG and IT stocks as surging oil prices played spoilsport amid prolonged Russia-Ukraine war.
The 30-share Sensex opened higher and rose over 260 points to touch the day's high of 58,127.95. However, losses in banking, oil and FMCG stocks dragged the index down by 634 points to touch a low of 57,229.08.
The barometer settled at 57,292.49, down by 571.44 points or 0.99 per cent. The index had rallied over 2,000 points in the previous two sessions.
The broader NSE Nifty declined by 169.45 points or 0.98 per cent to finish at 17,117.60 after rallying over 620 points in the past two sessions. It touched a high of 17,353.35 points and a low of 17,096.40 in the day trade.
Among Sensex constituents, Power Grid fell the most by 2.93 per cent, followed by Asian Paints (2.85 per cent), UltraTech Cement (2.81 per cent), Nestle (2.49 per cent), Kotak Bank (2.42 per cent) Hindustan Unilever (2.41 per cent) and HCL Technologies (2.32 per cent).
Index heavyweight Reliance Industries dropped by 0.5 per cent, HDFC by 1 per cent and ICICI Bank by 1.3 per cent.
In contrast, Sun Pharma, HDFC Bank, Maruti, Titan and NTPC were the only gainers.
"With no significant improvement in the tensions between Russia and Ukraine and uncertainty in the Gulf region, crude prices surged leading to a sell-off in the domestic market after the recent rally. FII's coming back to buying mode is a positive for domestic equities but a rise in bulk diesel prices and inflationary pressure are bending the domestic market," said Vinod Nair, Head of Research at Geojit Financial Services.
International oil benchmark Brent crude jumped 3.53 per cent to USD 111.5 per barrel on reports that European countries this week will consider an oil embargo on Russian oil, which could restrict supplies and fuel price rise.
A Houthi attack on an energy terminal in Saudi Arabia last week caused a temporary fall in oil production amid lower supplies by the oil cartel OPEC.
The broader market depicted a mixed trend with the BSE midcap declining 0.68 per cent, while the smallcap gauge gaining 0.38 per cent.
Among BSE sectoral indices, utilities tumbled 1.89 per cent, followed by power (1.81 per cent), FMCG (1.46per cent) and bank (1.30 per cent).
A total of 1,971 stocks declined, while 1,550 advanced and 149 remained unchanged on BSE.
"Markets started the week on a muted note and lost nearly a per cent, tracking mixed global cues," according to Ajit Mishra, VP - Research, Religare Broking Ltd.
In the Asian trade, Japanese markets were closed for a holiday while Shanghai ended marginally higher and Hong Kong went lower. Stock exchanges in the US closed with significant gains on Friday.
Stock exchanges in Europe were trading higher in mid-session deals.
Foreign institutional investors were net buyers as they bought shares worth Rs 2,800.14 crore on Thursday, according to exchange data.
Rupee Slumps 31 Paise To Close At 76.15 Against The US Dollar
The rupee slumped 31 paise to close at 76.15 (provisional) against the US dollar on Monday as rising crude oil prices and a lacklustre trend in domestic equities weighed on investor sentiment.
At the interbank foreign exchange market, the rupee opened at 76.08 against the American currency, then lost further ground to settle at 76.15, down 31 paise from the previous close.
On Thursday, the rupee spurted by 37 paise to close at 75.84 against the US dollar.
The forex market was closed on Friday on account of Holi.
"The dollar is in rally mode as markets expect an even more hawkish Federal Reserve moving forward. Weakness in domestic equities and higher crude oil prices also weighed on the local unit," said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar further said that there are a handful of economic events this week and the focus will remain Ukraine-Russia peace talks, which will drive risk sentiments and crude oil prices.
"Spot USD/INR is having strong support at 75.70 and resistance at 76.45," Parmar noted.
Amid intensifying Russia-Ukraine conflict, investors assessed diplomatic efforts to negotiate an end to the war.
The US Dollar has bounced back from recent declines after Federal Reserve officials said the central bank may need to be more aggressive to deal with inflation.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent lower at 98.20.
Global oil benchmark Brent crude futures jumped 3.47 per cent to USD 111.68 per barrel.
On the domestic equity market front, the 30-share Sensex ended 571.44 points or 0.99 per cent lower at 57,292.49, while the broader NSE Nifty fell 169.45 points or 0.98 per cent to 17,117.60.
Foreign institutional investors remained net buyers in the capital market on Thursday, as they purchased shares worth Rs 2,800.14 crore, according to stock exchange data.