The benchmark Sensex on Monday recorded its first drop in three sessions after fluctuations for better part of the session, falling over 49 points as caution prevailed ahead of derivatives expiry during a holiday-shortened week.
Furthermore, a weak closing in Asia, subdued commodity prices on the back of a rising dollar and concerns over Chinese demand and a lower opening in European markets kept investors on edge.
The gauge opened higher, but fell to a low of 25,747.01 as participants started booking profits in recent gainers.
At the close, it was down 49.15 points, or 0.19% at 25,819.34.
The index had risen 385.97 points in the past two sessions after the government announced a 3% interest subsidy for exporters running for five years and Fed minutes showed that the US top bank would proceed with care in tightening rates after a likely lift-off in December.
The 50-share NSE Nifty ended down 7.30 points, or 0.09%, at 7,849.25 after shuttling between 7,877.50 and 7,825.20.
Of the 30-pack Sensex, 18 ended with losses and 12 higher.
Brokers said trading volumes remained thin as investors kept their commitments restricted as markets will remain closed on Wednesday on account of Guru Nanak Jayanthi. November’s futures and options expiry is coming up on Thursday.
Investors after remaining buyers in the past two sessions opted to book profit in heavy-weight stocks.
The rupee depreciated 25 paise to 66.44 against the American currency (intra-day), which too weighed, they said.
Shares of metal companies bore the brunt, with Hindalco and Vedanta Ltd falling up to 3.82% after the BSE announcement that both companies will shift out of the benchmark Sensex from December 21.
Tata Steel, too, faced selling pressure and ended 2.31% down.
Other losers which contributed to the fall include ITC Ltd, Sun Pharma, NTPC, Cipla, ONGC and HDFC Ltd.
Those which gained and capped the loss include Hero MotoCorp, Bajaj Auto, Lupin, Dr Reddy and Axis Bank.
Sector-wise, the BSE Metal index suffered the most by plunging 1.21% followed by FMCG and PSU.
Supported by persistent buying from retail investors, the broader markets outperformed the Sensex, with the small-cap index rising 0.46% and the mid-cap index gaining 0.36%
Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 94.09 crore last Friday, according to provisional data released by stock exchanges.