Market benchmark Sensex on Monday edged lower on weakness, mostly in banking stocks, ignoring strong factory output data as investors preferred to stay light on positions ahead of the Reserve Bank India (RBI) monetary policy meet, which will be held on Tuesday. ICICI Bank with a loss of 5.63 per cent was the worst hit from the Sensex pack followed by State Bank of India (SBI) at 3.92 per cent down.
However, market experts believe that investors put their investments on hold, keeping themselves on wait-and-watch mode due to the RBI policy review meet.
"Despite positive macroeconomic developments, participants failed to muster much cheer and continued to await the outcome of RBI's monetary policy meet scheduled for Tuesday," said Shreyash Devalkar Fund Manager Equities, BNP Paribas MF.
Country's biggest lender SBI dropped to its lowest level in almost two years, while leading private lender ICICI Bank plunged the most in five months. Besides, auto leader Maruti Suzuki India, the maker of half the cars sold in India, slid the most in a week after sales fell in January. larsen and Toubro ltd (l&T), the largest engineering company, also climbed after saying it doesn't expect a slowdown in orders in the year through March.
Resuming its slide, the BSE index dropped by 46 points to 24,824.83 as the Chinese manufacturing activity fell to its lowest level in three years. However, domestic manufacturing sector returned to growth in January, expanding at a four-month high pace on rise in new business orders, a monthly Purchasing Managers Index (PMI) survey conducted by Nikkei and Markit showed.
The Sensex resumed higher at 24,982.22 and firmed up to a high of 25,002.32 on initial buying. But, fell afterwards to 24,788.58 before ending at 24,824.83, showing a loss of 45.86 points or 0.18 per cent. The 50-share NSE Nifty moved down by 7.60 points or 0.10 per cent to 7,555.95. "With the approaching Budget announcement carrying the potential for more spending, RBI could opt to ride out such event risk, before taking a call on easing further," said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas Financial Services.
From the auto sector, Maruti Suzuki, Hero MotoCorp and Bajaj Auto saw selling pressure and fell up to 3.68 per cent on tepid monthly sales figures for January. Shares of engineering major larsen & Toubro (l&T) ended 1.81 per cent higher after the company reported 19 per cent increase in consolidated profit for the third quarter.
Overseas, Asian markets ended mixed after sharp gains in the previous trading session. Key indices in China, Hong Kong and Singapore moved down by 0.45 per cent to 1.78 per cent while Japan, South Korea and Taiwan moved up by 0.14 per cent to 1.98 per cent.
Europe was lower in afternoon trade as key indices in France, Germany and the UK moved down between 0.51 per cent and 0.69 per cent. Back home, out of the 30-share Sensex pack, 16 scrips ended lower. Major losers were ICICI Bank (5.63 pc), SBI (3.92 pc), Maruti (3.68 pc), Axis Bank (2.17 pc), HUl (1.96 pc), Dr Reddy's (1.73 pc), NTPC (1.37 pc), Hero MotoCorp (1.20 pc), Bajaj Auto (1.15 pc), RIl (0.67 pc) and ONGC (0.55 pc). However, Adani Ports rose by 3.67 per cent followed by Coal India 2.67 per cent, Bharti Airtel (2.35 pc), Asian Paints (2.12 pc) and Cipla (2.07 pc).