India's main stock indexes snapped two sessions of gains to end a tad lower on Monday, dragged by banks and heavyweight Reliance Industries Ltd, although a rally in IT stocks after HCL Technologies raised its outlook capped losses.
The NSE Nifty 50 index closed 0.21% lower at 11,440.05, while the S&P BSE Sensex ended down 0.25% at 38,756.63.
Top private-sector lender HDFC Bank Ltd dropped 1.9% and was the biggest drag on the indexes, while ICICI Bank Ltd fell 1.8%. The Nifty Bank Index slid 1.7%.
"(The) market is in an overbought zone, so sentiment is weak," said Rahul Sharma, market strategist and head of research at Equity99 markets, adding, there would be volatility in the coming sessions.
Buoyed by a flush of liquidity in global markets, India's main stock indexes have rallied more than 50% since a coronavirus-led selloff in March, even as domestic cases soared.
On Monday, however, the Nifty Smallcap 100 jumped 5.4% and the Nifty Midcap 50 Index rose 2.6% after the country's markets regulator said multi-cap funds must invest at least 25% each in large-cap, mid-cap and small-cap stocks.
IT firm HCL Technologies Ltd was the biggest percentage gainer on the Nifty, jumping 10.2% to a record high after it upgraded revenue and operating margin outlook for the September quarter.
It gave a fillip to IT stocks, pushing the Nifty IT index 4.7% higher to an all-time peak.
Reliance Industries ended 0.7% lower after hitting a record high earlier in the session, after local daily Mint reported that private equity firm Carlyle Group was looking to invest up to $2 billion in the conglomerate's retail business.
Investors are also awaiting August inflation data due later in the day, likely to have stayed above the central bank's medium-term target range for the fifth straight month, according to a Reuters poll.
