BENGALURU: Indian shares declined on Monday, weighed down by broad-based profit booking, while small- and mid-caps extended their slide on rising concerns over high valuations.

The NSE Nifty 50 index was down 0.76% at 21,616.05, while the S&P BSE Sensex settled 0.73% lower at 71,072.49.

“This is another bout of profit booking and it was always on the anvil,” said Siddharth Sedani, head of equity product and advisory support at Anand Rathi Financial Services, adding that the “RBI’s decision to not relax its monetary policy stance also disappointed markets.”

Last week, the RBI doused hopes of early rate cuts and projected elevated inflation for fiscal 2025 at its policy meeting.

The broader, more-domestically focussed small-caps and mid-caps declined 4% and 2.5%, respectively, extending their underperformance over the Nifty 50 for the second consecutive session.

The risk of significant correction in small- and mid-caps is steadily growing due to extremely elevated valuations, said G Chokkalingam, founder and head of research at Equinomics Research.