Automobile stocks drag markets down

Mumbai: After a day's breather, benchmark indices Sensex and Nifty on Monday resumed their weakening trend to settle around the levels seen two months ago, mainly due to heavy selling in auto stocks.

Besides, weak Asian stocks coupled with sustained outflow of foreign funds weighed on investors' sentiment. The 30-share Sensex ended 196.82 points, or 0.52 per cent, lower at 37,688.28, while the broader NSE Nifty fell 95.10 points, or 0.84 per cent, to settle at 11,189.20.

The auto sector that was grappling with tepid sales numbers and growth concerns has to face a new challenge in the wake of the government's announcement of new policy measures, including lower taxes, to push electric vehicles.

One more hurdle came in the way of this traditional sector in form of government's proposal to hike registration fees for old and new vehicles, leading to heavy sell-offs in auto stocks.

Sectorally, BSE auto tumbled 3.55 per cent, metal dropped 3 per cent, telecom slipped 2.85 per cent -- top three laggards. On the contrary, BSE IT, bank and teck ended in the positive terrain.

The market breadth was tilted in favour of sellers on the BSE as 1,706 stocks declined and 766 advanced. Of the 30 stocks of Sensex, 23 ended in the red and only 7 closed in the green.

Meanwhile, the Indian rupee appreciated by 14 paise to close at 68.75 against the US dollar. The global crude benchmark, Brent Oil, was trading 0.11 per cent lower at $63.30 a barrel.