Profit booking, coupled with heightened chances of a US rate hike and a weak rupee subdued the Indian equity markets during late - afternoon trade session on Monday.
Consequently, the barometer 30 - scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) traded deep in the red. It plunged by 400 points or 1. 58 percent.
Similarly, the wider 50 - scrip Nifty of the National Stock Exchange (NSE) receded into the negative territory. It declined by 118 points or 1. 53 percent, at 7, 598. 75 points.
The Sensex, which opened at 25, 417. 11 points, traded at 24, 937. 06 points (at 2:50 p. m. ) - - down 400. 50 points, or 1. 58 percent from the previous day's close at 25, 337. 56 points.
During the intra - day trade so far, the Sensex touched a high of 25, 432. 94 points and a low of 24, 923. 86 points.
The BSE market breadth favoured the bears - - with 1, 950 declines and 644 advances.
The barometer index had closed the last trade session flat on March 23.
The Indian equity markets were closed from March 24 - 25, on account of Holi and Good Friday.
On Monday's trade, market analysts pointed out that profit booking dragged the equity markets lower.
In addition, investors were seen hesitant to chase prices due to the heightened chances of a US rate hike next month. Recent US economic growth data have increased chances of a rate hike.
A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.
Besides, a weak rupee and unwinding of long positions ahead of the derivatives expiry and the financial year end dampened sentiments.
The rupee opened at 66. 85 - 86 to a US dollar from its previous close of 66. 62 - 63 to a greenback.
Nitasha Shankar, vice president for research with YES Securities, said that Indian markets were trading on a weak note taking cues from their global peers.
"Headline index Nifty has failed to sustain above the 7, 700 level, leading to minor corrections. However, volumes are thin in the current correction, indicating a pause and consolidation before indices resumed their upward journey, " Shankar noted.
"Broader markets are also trading with minor weakness in line with the headline indices. All major indices are trading in the red. Metals, reality and pharma indices are leading the correction as high beta stocks are witnessing unwinding of long positions. "