The BSE Sensex declined 300 points, while the 50-share Nifty slipped below the key 6,050 mark on Monday after data showed April's trade deficit widened to $17.8 billion.
Gold and silver imports were up by 138 per cent to $7.5 billion last month compared to a year earlier, as retail consumers in the world's biggest gold importer went on a buying spree after global prices fell. (Read full story here)
Traders also attributed the sharp cut to profit taking after the Sensex and Nifty closed at their 28-month high last week. Market analyst Sarvendra Srivastava said the Nifty has strong support at 6,000-6,019 levels.
The largest cut was witnessed in FMCG stocks, with tobacco major ITC falling 4.5 per cent. ITC saw profit booking after gaining 7.7 per cent in May, as of Saturday's close, and marking its all-time highest close in the previous session.
Capital goods and IT stocks were also hit. State -run BHEL and India's biggest engineering firm L&T declined 2-2.5 per cent. HCL Tech, TCS and Infosys also retreated.
DLF declined 1.4 per cent after it said in a statement late on Saturday that the company will sell about 81 million shares at a price band of 222 rupees to 233 rupees each.
Only six stocks traded higher on the Nifty. Dr.Reddy's Laboratories traded with over 1 per cent gains on expectations that it would beat March-quarter estimates. Dr Reddy will post its March quarter results on Tuesday.