BENGALURU: Indian shares closed nearly 2% lower on Monday, hurt by a selloff in information technology (IT) stocks, as increasing cases of the Omicron coronavirus variant spooked investors ahead of the central bank’s decision on interest rates.

The blue-chip NSE Nifty 50 index slipped below the 17,000 mark and was down 1.65% at 16,912.25, while the benchmark S&P BSE Sensex was 1.65% lower at 56,742.35 at the closing bell. Both indexes posted their lowest close since Aug. 27.

Most major sub-indexes ended lower, with IT, auto and pharma stocks falling the most, as India’s tally of reported cases of the heavily mutated Omicron coronavirus variant rose to 12 on Sunday.

“Ambiguity surrounding Omicron continued to dent the morale of domestic investors ahead of the important Reserve Bank of India (RBI) policy announcement on Wednesday,” said Vinod Nair, head of research at Geojit Financial Services. “The domestic market is expected to be volatile as the near-term will be dominated by developments on new variant and policy decisions.”