Sensex, Nifty tank nearly 1%; HDFC Bank drags

The 30-share BSE Sensex tumbled 692.89 points or 0.87 per cent to settle at 78,956.03.

During the day, it tanked 759.54 points or 0.95 per cent to 78,889.38.

The NSE Nifty slumped 208 points or 0.85 per cent to 24,139.

From the 30 Sensex firms, HDFC Bank declined over 3 per cent.

Tata Steel, Bajaj Finance, State Bank of India, Tata Motors, Power Grid and JSW Steel were the other laggards.

In contrast, Titan, HCL Tech, Nestle, Sun Pharma, Reliance and Mahindra & Mahindra were the gainers.

"The MSCI rebalancing is unfolding as anticipated, leading to mixed reactions among stocks -- some are seeing gains, while others are experiencing profit-booking.

"A key focus is HDFC Bank, which will see an increased weight, though with a lower adjustment factor.

"Consequently, the inflows will occur in two tranches, amounting to over $1.8 billion.

"HDFC Bank is currently under pressure after outperforming the market in the days leading up to the MSCI rebalancing, driven by expectations despite its weak earnings.

"The stock is now facing profit-booking as investors react to the phased inflows," said Santosh Meena, head of research, Swastika Investmart Ltd.

In Asian markets, Seoul, Tokyo Shanghai and Hong Kong settled in the positive territory.

Foreign Institutional Investors (FIIs) again turned sellers on Monday as they offloaded equities worth Rs 4,680.51 crore after a day's breather, according to exchange data.

"The weightage of HDFC Bank, the biggest private lender in India, would rise in its MSCI Global Standard Index over the course of two tranches.

"Although the street had expected the same thing to happen all at once," Arvinder Singh Nanda of Master Capital Services Ltd said.

Global oil benchmark Brent crude declined 0.35 per cent to $82.01 a barrel.