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Indian equity benchmarks ended in the red for a fifth straight session on Monday, with Realty and Metal stocks dragging the most, as investor worries ballooned over possibilities of a quicker rate hike from the U.S. Federal Reserve. The benchmark indices started trade on a lower note, as continued selling by foreign institutional investors (FIIs) weighted on domestic markets. As per provisional data available on the NSE, FIIs net sold shares worth Rs 3,148.58 crore. Some cautiousness came in as former RBI Governor Raghuram Rajan said the Indian economy has some bright spots and a number of very dark stains and the government should target its spending carefully so that there are no huge deficits. Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic. Sentiments remained down-beat with the Ministry of Statistics and Programme Implementation in its latest report has said that as many as 445 infrastructure projects, each entailing investment of Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.4 lakh crore. It said reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Key indices continued to reel under the selling pressure in second half of trading session, as nervousness ahead of the upcoming Budget announcements were weighing on the investment sentiment. Traders also got cautious, with a survey done by a consultancy firm has revealed that India Inc is staring at an ''integrity crisis'' in the second year of the pandemic. Traders overlooked the Services Export Promotion Council’s (SEPC) statement that it looks to set an export target of $300 billion for 2022-23 as it expects resumption of regular international travels and other business activities in the coming time. Market participants also paid no heed towards the commerce and industry minister Piyush Goyal’s statement that a year 2022 will be the breakthrough year which will unlock the country's exponential value. He noted that services export has reached more than $178 billion in April-December 2021 despite the Covid-19 pandemic when the Travel, Hospitality & Tourism sectors were significantly down.

On the global front, Asian markets ended mostly lower on Monday with U.S.-Russia tensions over Ukraine and fears about the Fed tightening monetary policy more aggressively in 2022 weighing on sentiment. Investors also awaited the U.S. fourth-quarter GDP data, the outcome of a Federal Reserve meeting and a slew of U.S. earnings reports due throughout the week for directional cues. European markets were trading lower as flash survey results from IHS Markit showed Eurozone private sector growth eased in January as the Omicron variant hit the services activity. The flash composite output index slid to an 11-month low of 52.4 in January, from 53.3 in December.

Back home, on the sectoral front, aviation industry stocks were in focus as Icra stated that hit by the third wave of the pandemic that led to massive cancellations of domestic flights and extension of the ban on scheduled international flights till the end of the next month, the airports are set to see a 10-percentage-point fall in their revenue recovery this fiscal to 52 per cent of the pre-pandemic level. Besides, Gem and jewellery industry stocks were buzzing as the Gem and Jewellery Export Promotion Council said India's gem and jewellery exports during December 2021 grew 29.49 per cent to $3,040.92 million (Rs 22,914.6 crore) as compared to $2,348.44 million (Rs 16,712.46 crore) in December 2019 -- the pre-pandemic year.

Finally, the BSE Sensex fell 1545.67 points or 2.62% to 57,491.51 and the CNX Nifty was down by 468.05 points or 2.66% to 17,149.10.

The BSE Sensex touched high and low of 59,023.97 and 56,984.01, respectively. All 30 stocks were declining on the index .

The broader indices ended in red; the BSE Mid cap index fell 3.82%, while Small cap index was down by 4.43%.

The top losing sectoral indices on the BSE were Realty down by 5.94%, Metal down by 5.03%, Basic Materials down by 4.47%, Consumer Durables down by 4.14% and Consumer Discretionary down by 3.99%, while there were no gaining sectoral indices on the BSE. 

The top losers on the Sensex were Tata Steel down by 5.98%, Bajaj Finance down by 5.97%, Wipro down by 5.35%, Tech Mahindra down by 5.14% and Titan Company down by 4.97%, while there were no gainers on the BSE.

Meanwhile, additional Director General of Foreign Trade Amiya Chandra said India has set up a target of $500 billion exports for the 2022-23 fiscal, contending that the COVID-19 pandemic has taught the country to reimagine world trade. In December 2021, exports stood at $37.8 billion, the highest-ever for any month. He added that ‘we are bang on target to touch $400 billion for the current fiscal. So far in the first nine months, the country's exports were to the tune of $301.38 billion’.

He highlighted that India is targeting $1 trillion exports by 2027. He said the apprehension that COVID-19 would lead to a sharp decline in foreign trade has turned out to be negative. However, the pandemic has taught us to reimagine world trade. He said the fulcrum of international trade has shifted from Europe and the United States to South East Asia.

Chandra also said that the world is moving away from multilateral trade agreements to bilateral ones, and India is presently in the process of entering into six FTAs. He said going ahead, artificial intelligence and other forms of technology will become important in matters relating to trade. He noted that a separate portal for MSMEs will be launched soon.

The CNX Nifty traded in a range of 17,599.40 and 16,997.85 and there was 2 stocks advancing against 48 stocks declining on the index. 

The few gainers on Nifty were Cipla up by 2.84% and ONGC up by 1.25%. On the flip side, JSW Steel down by 6.92%, Bajaj Finance down by 6.36%, Tata Steel down by 5.92%, Grasim Industries down by 5.81% and Hindalco down by 5.76% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 104.43 points or 1.39% to 7,389.70, France’s CAC decreased 146.36 points or 2.07% to 6,922.23 and Germany’s DAX decreased 316.20 points or 2.03% to 15,287.68.

Asian markets ended mostly lower on Monday as investors remained cautious ahead of the US Federal Reserve's policy meeting this week. Chinese shares ended almost flat after a former member of the monetary policy committee of the People's Bank of China said a looser monetary policy won't be sufficient to stabilize the Chinese economy and more government spending is needed to drive economic recovery. However, Japanese shares gained marginally after a survey showed factory activity in Japan grew at the fastest pace in four years in January.