Shares closed at a near-two-week low on Monday, logging their third straight day of losses, dragged down by a rise in COVID-19 cases in China and the likelihood of a tighter US monetary policy.
The S&P BSE Sensex ended down 0.84% to 61,144.84 and NSE Nifty 50 index lost 0.81% to 18,159.95.
The Nifty IT and Nifty Realty indexes were top drags, falling 1.55% and 1.27%, respectively, while public sector bank, media, and consumer durables indexes gained.
Worries over China's COVID cases and U.S. monetary policy also weighed on Asian and European markets.
In India, markets were pressured by the China COVID situation, although foreign investor inflows were positive and domestic institutions were taking profit, said Anita Gandhi, director at Arihant Capital Markets.
"With the results season over, markets are focusing on valuation. We are a bit expensive compared to global as well as Asia peers," Gandhi added.
As of Friday, foreign investors had purchased a net $3.71 billion worth of equities so far this month, while domestic investors had sold a net 33.70 billion Indian rupees ($412.14 million), Refinitiv data showed.
Goldman Sachs expects India's economic growth to slow to 5.9% next year, from an estimated 6.9% in 2022, as the boost from the post-COVID reopening fades and monetary tightening weighs on domestic demand.
Among individual shares, ONGC fell over 4%, its steepest decline in four months, tracking a drop in crude prices for the second session in a row, surrendering year-to-date gains.
