Mumbai, Dec 10 (IANS): Negative global markets along with caution ahead of the results of Assembly elections in five states and a rise in crude oil prices suppressed the key Indian equities indices during Monday's mid-afternoon trade session.
The key indices -- the S&P BSE Sensex and NSE Nifty50 - had a gap-down opening and subsequently shed over 655 points and 205 points each on an intra-day low basis.
According to market observers, heavy selling pressure in banking, consumer goods, oil and gas and capital goods stocks along with continuous outflow of foreign funds accelerated the downward trajectory of the equity indices.
At around 1 p.m., the wider Nifty50 of the National Stock Exchange (NSE) traded lower by 166.40 points or 1.56 per cent to 10,527.30 points.
The barometer 30-scrip Sensitive Index (Sensex), which opened at 35,204.66 points, traded at 35,133.23 points - lower by 540.02 points or 1.51 per cent - from its previous session's close of 35,673.25 points.
The BSE market breadth was bearish with 1,787 declines and 546 advances.
"Our markets have fallen in line with the other global markets which were down due to resurgence of US-China friction and rise in crude prices," HDFC Securities' Retail Research Head Deepak Jasani told IANS.
"Election results will be known on Tuesday. If the BJP does well compared to expectations in exit polls, then we could witness a minor relief rally. However, the overhang of negativity may still persist."
On Tuesday, the results of Assembly elections in Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram will be declared. The elections are considered as a crucial indicator of public mood before the Lok Sabha elections next year.
Besides the election outcome, a rise in crude oil prices after the Organization of Petroleum Exporting Countries (OPEC) and Russia decided to go in for a production cut of 1.2 million barrels per day from 2019 might hinder the markets' attempts to arrest the fall.
Investors were also spooked due to fears of slowing global economic growth and an escalation in trade protectionist measures after the arrest of Huawei's Global CFO over alleged violation of US sanctions on Iran.
On the currency front, the Indian rupee weakened to 71.32 against the US dollar from its previous close of 70.81.
"Dollar-rupee opened higher, around 71.35 on spot, after exit polls suggested that BJP may lose three major states," said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.
"If exit polls are true, then it can increase the political risk premium on the rupee."
Last Friday - the previous trade session - bargain hunting and lower crude oil prices lifted the key Indian equity market indices by around 1 per cent.
Consequently, the NSE Nifty50 had ended higher by 93 points or 0.87 per cent at 10,693.70 points, whereas the Sensex closed at 35,673.25 points, up 361.12 points or 1.02 per cent.