The BSE Sensex headed for a fourth consecutive day of decline on Monday, while the broader Nifty slipped below the key 6,200 levels. Markets have fallen on all trading days in 2014 so far, indicating a bad start to the new year.
Sensex was down 93 points at 20,757.63 while Nifty was off 30 points at 6,180.
Domestic markets tracked lower Asian shares after growth in China's services sector slowed sharply last month, raising concerns about the pace of recovery in the world's second-largest economy.
Foreign institutional investors sold Rs 608 crore worth of index futures on Friday, dampening sentiment. Overseas investors also sold shares worth Rs 18 crore on Friday.
The HSBC Services Purchasing Managers' Index, compiled by Markit, fell to 46.7 in December from 47.2 in November as new orders dwindled, although firms hired at their fastest pace in five months.
Traders are reducing positions ahead of Infosys' quarterly earnings on January 10 and inflation data mid-month. Infosys traded 1.8 per cent lower. India's number two outsourcer announced management changes on Friday and has appointed BG Srinivas and UB Pravin Rao as presidents with immediate effect.
Among other bluechips, ICICI Bank fell 2.2 per cent, while Reliance Industries traded down 1.3 per cent.
Shares in power producers declined on media reports that the state government in Maharashtra is planning to cut power tariffs. Tata Power fell 2.3 per cent and was the worst performer on the Nifty.
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