MUMBAI: Benchmark equity indices Sensex and Nifty fell in early trade on Monday amid elevated crude oil prices due to geopolitical uncertainties and caution ahead of the US Federal Reserve's policy decision later this week.
The 30-share BSE Sensex dropped 536.30 points to 72,583.86 in early trade. The 50-share NSE Nifty fell 200.10 points to 22,402.80.
From the 30 Sensex firms, Asian Paints, Bajaj Finance, Hindustan Unilever, Infosys, Bajaj Finserv and Reliance Industries were among the major laggards.
Kotak Mahindra Bank, Sun Pharma, Adani Ports and Axis Bank were the winners.
Brent crude, the global oil benchmark, traded 2.14 per cent lower at USD 114.2 per barrel.
In Asian markets, South Korea's Kospi, Japan's 225 index and Shanghai's SSE Composite index quoted lower, while Hang Seng index traded in positive territory.
The US markets ended lower on Friday.
"Indian equities are likely to remain under pressure as elevated crude oil prices, escalating geopolitical tensions and uncertainty over the US Federal Reserve's policy outlook weigh on investor sentiment. The continuing stand-off in the Middle East, with the risk of further escalation, remains a key concern for domestic markets," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
The Federal Reserve's October 27–28 policy meeting will be a key event for global markets this week, he said.
"Although the central bank is widely expected to leave interest rates unchanged, investors will look for signals on the future policy path. Any hawkish shift in tone could keep US Treasury yields elevated, strengthen the dollar and constrain foreign portfolio flows into emerging markets. Conversely, a more measured outlook could offer some relief to risk assets," Ponmudi added.
Foreign Institutional Investors (FIIs) bought equities worth Rs 887.65 crore on Friday, according to exchange data.
On Friday, the Sensex settled at 73,123.83, down 125.56 points, or 0.17 per cent. The Nifty dropped 87.65 points, or 0.39 per cent, to close at 22,600.