Heavy selling pressure was witnessed in the auto, banking and capital goods stocks.
Globally, stock markets slumped due to the escalating trade war concerns.
In the domestic market, the wider Nifty50 of the National Stock Exchange (NSE) closed at 10,762.45 points, down 59.40 points or 0.55 per cent from the previous close of 10,821.85 points.
Similarly, the barometer 30-scrip Sensex of the BSE, which had opened at 35,783.75 points, closed at 35,470.35 points — down 219.25 points or 0.61 per cent — from its previous session’s close of 35,689.60 points.
The Sensex touched an intra-day high of 35,806.97 and a low of 35,430.11 points.
In the broader markets, the S&P BSE mid-cap declined by 0.80 per cent and the S&P BSE small-cap ended 0.89 per cent lower from its previous close. The BSE market breadth was bearish with 1,775 declines and 819 advances so far.
“Markets corrected on Monday after witnessing a rally last Friday. The weakness came on the back of weak global cues as trade tensions continued between US and China,” said Deepak Jasani, Head of Retail Research at HDFC Securities.
Abhijeet Dey, Senior Fund Manager for Equities at BNP Paribas Mutual Fund, said: “Sentiment across Asia was negative after the US Treasury department announced its decision to scrutinise Chinese investments in sensitive US industries concerned with economic and national security.”
Major Asian markets closed on a negative note and the European indices like FTSE 100, CAC 40 and DAX traded in the red, Jasani said.
On the currency front, the Indian rupee weakened by 29 paise against the US dollar to 68.13, from its previous close of 67.84 per greenback.
Investment-wise, provisional data with exchanges showed that foreign institutional investors purchased scrip worth Rs 198.68 crore while the domestic institutional investors sold stocks worth Rs 86.22 crore.
Sector-wise, the S&P BSE IT index and the Teck (technology, media and entertainment) index were the gainers on Monday, ending higher by 115.29 points and 40.56 points respectively.
On the other hand, S&P BSE auto index slumped by 371.94 points, the banking index was down 279.83 points and the capital goods index ended 233.08 points lower from its previous close.
Stock-wise, the major gainers on the Sensex were Infosys, up 2.07 per cent at Rs 1,272.30; Kotak Mahindra Bank, up 0.70 per cent at Rs 1,329.45; Vedanta, up 0.70 per cent at Rs 230.25; IndusInd Bank, up 0.65 per cent at Rs 1,967.10; and HDFC Bank, up 0.58 per cent at Rs 2,093.95 per share.
The top losers were Tata Motors (DVR), down 7.08 per cent at Rs 168.75; Tata Motors, down 5.94 per cent at Rs 289.85; ICICI Bank, down 3.79 per cent at Rs 289.45, Coal India, down 2.28 per cent at Rs 259.05; and Larsen and Toubro, down 2.05 per cent at Rs 1,269 per share.