The Sensex, which hovered around 16,200 levels for some time, saw a loss of 352.39 points, or 2.15%, to close the day at 16,063.18 points. The Nifty plunged by 130.50 points, or 2.68%, to close the day at 4,739.60 points.
The continuing spectre of higher prices and the crisis on the oil front worried market players. Manish Sonthalia, vice president, equity strategy, at broking firm Motilal Oswal Securities, said, We broke very important levels on Monday, mainly on the back of some exaggerated selling. Also, some issues like the increase in inflation due to the oil prices are lingering for some time, justifying the apprehension of the investors.
Some experts also attribute Mondays fall to the political confusion caused by the three-MPs-strong Left Front constituent Revolutionary socialist Party threatening to withdraw from the UPA-Left Coordination Panel, and asking the remaining Left constituents to review their relations with the UPA government.
The sell-off was equally noticeable in the broader markets on Monday, keeping the market breadth bleak throughout the trading session. Around 600 stocks advanced against 2,066 stocks that declined.