Falling for the first time in more than a week, stocks, led by Bharti, shed 1.6 per cent on Monday as investors pulled out profits after the market rallied to its highest close in 16 months last week. The 30-share BSE Sensex ended down 268.14 points at 16,866.41, its first loss since September 25. The 50-share NSE Nifty index shed 1.58 percent to 5,003.20 points.

There was hectic selling in some blue-chip stocks on investors casting doubts over valuations after the benchmark Sensex scaled a 17-month high on heavy buying in the previous 3 sessions. Huge fund raising by companies by way of public issues and qualified institutional placements had given way to concerns over liquidity in secondary market.

"We seem to be heading towards some kind of correction but I can't say how much. There is some degree of profit booking coming in. People are turning cautious as far as results are concerned, since we have already seen two quarters of good growth," said a dealer.

Bharti Airtel fell as much as 9.1 per cent as analysts said the MTN deal hang-up was short-term relief and could affect Bharti's long-term growth as the Indian market saturates and rising competition puts pressure on call tariffs and hits margins. The stock closed down 8.05 per cent at Rs 400.30. Reliance Communications fell 5.6 per cent to Rs 300.20, while Idea Cellular was down 4.3 per cent at Rs 70.60.