Indian shares dropped on Monday, dragged mainly by banks and consumer firms after lacklustre quarterly updates from key constituents raised concerns about continuing corporate weakness.
The Nifty 50 fell 1.62% to 23,616.05 points while the BSE Sensex slid 1.59% to 77,964.99.
All 13 major sub-sectors retreated on the day, with high-weightage financials shedding 1.76%. The more domestically focussed smallcaps and midcaps fell about 3% each.
HDFC Bank, the heaviest stock on the Nifty 50, fell 2.2% after it posted a sequential dip in its current and savings account deposits for the three months ended December.
State-run banks also dropped 4%, led by a 7.5% slide in Union Bank of India after the lender's total business and deposits dropped sequentially.
"Early earnings updates, especially on the banking front, have been uninspiring," said Aishvarya Dadheech, chief investment officer of Fident Asset Management.
"Investors are nervous that lacklustre earnings may continue and any meaningful recovery may take some more time".
The Nifty volatility index rose to 15.65, signifying higher volatility in the market. The level is the index's highest since late November, when the benchmarks had slipped into correction.
Local metal firms lost 3%, tracking global peers as a firmer dollar weighed. A stronger greenback makes metals more expensive for holders of other currencies.
Going ahead, markets will take directional cues from earnings, two analysts said. Indian companies' December-quarter earnings kick off this week with the country's top IT services
company, Tata Consultancy Services, reporting on Jan. 9.
Among individual stocks, Dabur India fell 3.8% after its third-quarter update signalled a likely earnings miss. It was the top percentage loser on the consumer index, which fell about 2%.
ITC lost 2.8% on the day, as the tobacco-to-stationery giant's stock accounted for the spin-off of its hotels business.
