Key Indian equity indices descended sharply on Sept 25, extending losses for the fifth session in a row, as weak global cues on the back of prevailing geo-political tensions, coupled with profit booking and expensive valuations, hampered investors' risk-taking appetite.
Besides, heavy selling pressure in index heavyweights like Adani Ports, ITC, Lupin and Tata Steel, among others, along with persistent outflow of foreign funds, subdued market sentiment.
According to market observers, investors remained cautious about the government's plans for a stimulus programme, which might lead to a huge fiscal deficit.
On a closing basis, the wider Nifty50 of the National Stock Exchange (NSE) slipped by 91.80 points or 0.92 per cent to close at 9,872.60 points.
The 30-scrip Sensitive Index (Sensex) of the BSE closed at 31,626.63 points, down by 295.81 points or 0.93 per cent, from its previous close at 31,922.44 points.
The BSE market breadth was bearish with 2,020 declines and 541 advances.
"Carrying on from last Friday, markets continued to correct sharply on Monday. It was the fifth consecutive session of losses for the Nifty and came on the back of weak global cues," said Deepak Jasani, Head - Retail Research, HDFC Securities.
"Major Asian markets have ended on a negative note, barring the Nikkei index. European indices like FTSE 100 and and CAC 40 traded lower," he added.
In terms of the broader markets, the S&P BSE mid-cap index tanked by 1.14 per cent and the small-cap index by 2.02 per cent.
Vinod Nair, Head of Research, Geojit Financial Services, said: "Outflow of foreign funds due to the concern on gap between high valuation and earnings growth, and (US) Fed's stance to trim their balance sheet, impacted the market sentiment."
"Investors are also looking forward for the announcement of stimulus package by the Prime Minister later today, while at the same time concern on fiscal slippage influenced profit booking," Nair added.
In terms of investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 1,249.45 crore while domestic institutional investors (DIIs) purchased stocks worth Rs 1,009.98 crore.
On the currency front, the rupee weakened by 31 paise to close at 65.10-11 against the US dollar from its last week's close at 64.79-80.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the benchmark indices extended losses as investors turned jittery on expectations that the government will tinker with its fiscal deficit target for FY18 by announcing an economic stimulus to revive the economy.
"Prime Minister Narendra Modi might announce a package later today for power, housing and social welfare programmes to generate jobs and perk up demand. The package is being pegged at Rs 40,000-50,000 crore," Desai said.
All the 19 sub-indices of the BSE closed in the red. Sector-wise, the S&P BSE capital goods dipped by 281.08 points, automobile index by 252.35 points and healthcare index by 242.14 points.
Major Sensex gainers on Sept 25 were: Coal India, up by 1.20 per cent at Rs 256.95; ICICI Bank, up by 0.87 per cent at Rs 279.50; Hindustan Unilever, up by 0.55 per cent at Rs 1,246.35; Reliance Industries, up by 0.36 per cent at 820.45; and Tata Consultancy Services, up by 0.23 per cent at Rs 2508.20.
Major Sensex losers were: Adani Ports, down by 3.29 per cent at Rs 388.05; Kotak Bank, down by 2.24 per cent at Rs 999.70; Lupin, down by 2.20 per cent at Rs 991.30; Tata Steel, down by 2.20 per cent at Rs 640.15; and ITC, down by 2.18 per cent at Rs 262.40.
