Mumbai: The Sensex Monday dropped by 129 points to end at 17,391.98 -- its lowest closing in over a week -- on fresh weakness in rupee, monsoon concerns and expectations of subdued corporate earnings.
In line with Asian indices, the BSE benchmark index opened with losses as investors interpreted the recent US jobs data and lower inflation in China as signs of a slowing world economy. Across-the-board selling started after the rupee touched a one week low of 56.07 a dollar intra-day.
A lower opening in Europe extended the weak trend in India and the Sensex closed at 17,391.98, down 129.14 points. It had last closed at a lower level on June 28 (16,990.76.)
As many as 27 constituents led by Hero MotoCorp, Tata Steel, Bajaj Auto and Tata Power of the 30-share Sensex closed lower while only TCS, Dr Reddy and Hindalco closed up.
The Nifty fell 41.80 points, or 0.79 percent to 5,275.15.
Shares of metal, power, capital goods, auto and realty sectors fell sharply on heavy selling with market breadth being weak as 1,772 stocks out of 2,971 traded ended lower.
Experts feel investors are worried over the April-June earnings which will start pouring in from later this week.
"Expectations from results are not very high in our view," said Dipen Shah, Head-Fundamental Research, Kotak Securities.
Traders said worries over monsoon fuelled speculation about scarcity of foodgrains and price rise. Brokerage Emkay Global estimates that a 10 percent deficient monsoon will imply 3.7 percent contraction in foodgrain production.
Prime Minister's Economic Advisory Council chief C Rangarajan in New Delhi said RBI will find it difficult to cut interest rates if inflation does not soften.
Key indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan fell by between 0.8-2.37 percent while Germany, the UK and France in Europe were also trading lower in afternoon deals.
Market participants said global stocks declined today after a string of negative global developments hit sentiment, including a disappointing US jobs report and weekend comments from Chinese Premier Wen Jiabao highlighting his nation's economic pressures.
Asian stocks fell for a third day amid concern slower growth is damaging earnings and Japanese machinery orders fell more than expected, they added.
Trading in US index futures indicated that Dow Jones Industrial Average could fall 64 points on opening today.
Major losers from the Sensex pack were Hero MotoCorp (2.62 percent), Jindal Steel (2.56 percent), Tata Steel (2.32 percent), Bajaj Auto (2.30 percent), Maruti Suzuki (2.28 percent), Tata Power (1.98 percent), Sterlite Industries (1.72 percent) and Cipla (1.69 percent).
Others like Wipro (1.58 percent), Bharti Airtel (1.49 percent), Sun Pharma (1.47 percent), HDFC (1.20 percent), L&T (1.20 percent), Gail India (1.16 percent) and BHEL (1.08 percent).
Among the sectoral indices, the BSE-Metal dropped by 1.55 percent, followed by the BSE-Power (1.54 percent), the BSE-Capital Goods (1.25 percent), the BSE-Auto (1.12 percent) and the BSE-Realty (1.05 percent).
Small-cap and mid-cap indices also declined by over 1 percent on selling from retail investors.
On macro front, the government will announce data on industrial production (IIP) for May on Thursday.
"Globally, equity and commodities investors and traders are increasing watching out for any expectation of stimulus from US and monetary easing from China. Nifty took supports at a trendline made from 4760 bottoms," said Milan Bavishi, Head Reseach, Inventure Growth and Securities.
The total turnover fell to Rs 1,818.07 crore from the last Friday's level of Rs 2,111.63 crore.