Indian equity benchmarks began the week in the red tracking largely negative moves across global markets, as investors remained cautious on the prospect of steep hikes in COVID-era interest rates and their impact on economic growth. Losses across sectors pulled the headline indices lower, with finacnial, IT and auto shares being the biggest drags.

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NSE

Both main indices fell as much as 0.6 percent in early deals. The Sensex slipped to as low as 54,151.7, down 330.1 points from its previous close, and the Nifty50 lost as much as 102.8 points to 16,117.9.

A total of 41 stocks in the Nifty50 basket started the day below the flatline. Bharti Airtel, TCS, Hindalco, Infosys, Hero MotoCorp, Tech Mahindra, Wipro and Bajaj Finserv — down around 1-3 percent at the open — were the worst hit among blue-chip laggards.

On the other hand, PowerGrid, Titan, Bharat Petroleum, Britannia and Cipla — rising up to half a percent — were among the top gainers.

Tata Consultancy Services (TCS), Infosys, Bharti Airtel and HCL Tech were the biggest contributors to the fall in both Sensex and Nifty50.

All sectors were under pressure in the morning, with the IT index being the worst hit among NSE's sectoral gauges.

Analysts awaited more of corporate earnings from India Inc for domestic cues.

"The sharp decline in prices of commodities, particularly of crude oil, metals, wheat and edible oil augurs well for inflation management in India. This means the RBI can afford to go a bit slow on hiking interest rates in India," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"The positive trend is likely to keep the domestic equity market resilient. The selling exhaustion from foreign institutional investors last week is another positive for the market for the short term," he said.

FIIs net sold Indian shares worth Rs 2,218.4 crore last week, which is less than one third compared with the previous week, according to exchange data.

TCS shares slumped after the country's largest software services exporter fell short of analysts' estimates on the earnings front, pulling the Nifty IT lower.

Pratik Gupta, CEO and Co-Head-Institutional Equities at Kotak Securities, told CNBC-TV18 he sees scope for further downside in earnings estimates for the IT sector.

“We have seen earnings come off and the extent of further cuts will depend on a recession in the US and also the European economies. It is a bit difficult to make that call right now, but chances are that you will probably see a fairly sharp slowdown in the US the way the Fed is hiking interest rates," he said.

DMart shares jumped as much as 3.8 percent after the company reported a nearly seven-fold increase in net profit for the April-June period as its revenue nearly doubled to Rs 10,038 crore on a year-on-year basis.

Overall market breadth remained in favour of the bulls, as 1,279 stocks rose and 818 fell on NSE.

Global markets

Equities in other Asian markets were largely in the red following a sluggish session on Wall Street. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.8 percent at the last count.

S&P 500 futures were down 0.6 percent, suggesting a lower opening ahead on Wall Street.

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