MUMBAI--Indian shares tracked regional markets lower Monday, with the benchmark index recording its biggest percentage-loss in nearly five months, as growth concerns in emerging economies weighed down on global markets.
The Bombay Stock Exchange's S&P BSE Sensex closed 2.0% lower at 20707.45 points, extending Friday's 1.1% fall. The 30-stock index had closed at a record-high of 21373.66 Thursday. But it has fallen in the past two sessions, after a weak manufacturing activity report from China and concerns over how emerging markets would fare as the U.S. rolls back its easy-money policies weighed on global markets.
The National Stock Exchange's 50-share Nifty index ended down 2.1% at 6135.85 points Monday.
The losses in "emerging markets and a falling rupee ahead of the U.S. Federal Reserve meeting (Tuesday and Wednesday) triggered the selling pressure," said Milan Bavishi, head of research at Inventure Growth and Securities Ltd. He expects the Nifty to find support at 6040.
Analysts said markets are closely watching the Fed's next steps in scaling back its monthly bond-buying program. Emerging markets have been supported by the Federal Reserve's policy of easy money, but any cut could pull money out of these risky markets and hurt growth.
Local markets also await the Indian central bank's monetary policy review scheduled on Tuesday. Most economists expect the Reserve Bank of India to hold its key lending rate steady at 7.75%.
All of the Bombay Stock Exchange's 12 sector indices ended lower, with rate-sensitive sectors among the top losers.
ICICI Bank--India's biggest non-state lender by assets--fell 4.5% to 1,010.05 rupees while competitor HDFC Bank declined 3.6% to 649.70 rupees.
Hindustan Unilever gained 1.7% to 575.55 rupees after its third quarter net profit exceeded market expectations. The consumer goods-maker posted a 21.9% increase in October to December net profit, helped by higher product sales and lower tax payments.
Weak stock markets and regional currencies also drove the Indian currency lower Monday. The rupee hit an over two-month low, breaching the 63 mark against the U.S. dollar. It was last trading at 63.07 compared with Friday's local spot market close of 62.66.
