Indian equity benchmarks fell on Monday as the country recorded more cases of the Omicron variant over the weekend, while investors awaited a central bank decision that could leave interest rates on hold to sustain an economic recovery from the pandemic lows in 2020.
The Sensex fell as much as865 points to hit an intraday low of 56,831 and Nifty 50 index dropped 260 points to 16,936.
The Nifty IT index fell 1.40 per cent and was set to mark its second straight session of losses. The Nifty Realty index rose nearly 2 per cent, while the Nifty Metal index climbed 1.35 per cent.
"Metal stocks are currently at an attractive valuation and we don't see any more correction in them in the near term. IT has performed well overall, but since activity in the U.S. is much lower for December, a slightly muted performance can be expected," said Anita Gandhi, director at Arihant Capital Markets.
The Nifty Auto index fell more than a per cent due to overall weak November sales data.
International markets are likely to slow down on Omicron concerns and Indian markets are expected to follow suit for some more time as there are no fresh positive triggers, Gandhi said.
India's tally of reported cases of the heavily mutated Omicron coronavirus variant rose to 12 on Sunday after the state of Maharashtra said it had detected seven new cases.
The three-day monetary policy committee meeting of the Reserve Bank of India started on Monday. According to a Reuters poll of economists, the Reserve Bank of India (RBI) will hold rates at its December meeting and hike its reverse repo rate early next year and increase repo rate the following quarter.
While the RBI is expected to maintain status quo on the interest rate policy, investors will watch out for commentary from the central bank to get direction.