Markets fell on Monday as metal stocks witnessed a sell-off on demand worries in top consumer China and as the technology sector slid on weak sentiment in global markets.
Nifty was down 0.35% at around 15,700 in early trade, while Sensex fell 0.3% to around 52,800. The indices rose about 0.3% each last week.
The Nifty metals index fell 2.5% as iron ore and steel prices tumbled on Chinese demand worries. China is also the top producer of metals. [MET/L]
The Nifty IT index, meanwhile, dropped 1.1%.
"There is a shift from growth to value stocks globally. Hence, we are seeing a sell-off in IT stocks ... The fear of degrowth in the U.S. and demand worries, (and) resurfacing of COVID-19 infections in China is dragging metals," said Saurabh Jain, assistant vice president, research at SMC Global Securities.
Mills in top steel producer China have idled dozens of blast furnaces as stocks piled up after domestic demand weakened, hit by COVID-19 lockdowns and bad weather.
The Indian government's move to introduce export duties for gasoil, gasoline and jet fuel to help maintain domestic supplies, and impose a windfall tax on oil producers on Friday also had an overhang on markets.
SMC Global's Jain said the taxes were a negative development for the market.
Meanwhile, Asian share markets started cautiously as a run of soft U.S. data suggested downside risks for this week's June payrolls report, while the hubbub over possible recession was still driving a relief rally in government bonds. [MKTS/GLOB]
Markets in the United States are closed for a holiday on Monday.
Among individual shares, supermarket chain operator Avenue Supermarts rose 3% after the company reported strong sales for the first quarter on Saturday.