In volatile trade, Indian shares fell for the fourth day in a row on Monday with Sensex losing 110.39 points to end at 17.103.31, its lowest closing since June 28, as weak monsoon and surging food prices dashed hopes of a rate cut by Reserve Bank later in July.
The BSE benchmark index opened higher on positive Asian cues but slided 0.64% to end the day at its lowest level as sentiment turned negative with IT, metal and realty stocks facing the maximum heat.
With this, the Sensex has lost over 510 points in the last four sessions.
Likewise, the NSE Nifty today fell 30 points to 5,197.25.
While headline inflation eased to 7.25% in June but food inflation, a key metric tracked by RBI and investors, rose to 10.81%.
"RBI may not ease rates going by the number released today," Crisil chief economist DK Joshi said.
The mood soured further as agriculture minister Sharad Pawar said farmers face a challenge this year as monsoon plays "hide and seek".
In the 30-share Sensex, 20 stocks including Tata Steel, Jindal Steel, TCS and Infosys closed with losses while ten scrips led by Bharti, Dr Reddy's and Maruti ended higher.
The market breadth continued to rule negative with 1,661 scrips losing ground against 1,160 ending higher with investor wealth dropping by Rs. 30,000 crore to Rs. 61.25 lakh crore.
Selling pressure was across the metal shares as worries over lower Chinese demand aggravated, brokers said. IT shares fell after Goldman Sachs reportedly slashed its IT spending forecast for 2012 to 3%, they added.
"The bounceback in US$/Rupee rates also didn't auger well for equity markets which succumbed to selling pressure," said Milan Bavishi, head research, Inventure Growth & Securities.
The rupee gave up most of its initial gains and was last trading at 55.25 compared to 54.8 levels seen intra-day.
Narrowly mixed Asian cues, where the China's Shanghai Composite Index tumbled by 1.74%, amid weak European trends also weighed on the market sentiment.
Key benchmark indices in Hong Kong, Singapore and South Korea ended up between 0.11% and 0.27% while from Taiwan closed down by 0.20%.
The Japanese market was closed on Monday on account of a holiday.
European stocks were quoting lower in their afternoon deals. The CAC was down by 0.29% while the DAX and the FTSE were lower by 0.20% each in afternoon deals.
Back home, major losers from the Sensex pack were Tata Steel (3.95%), TCS (3.16%), Jindal Steel (2.69%), Tata Motors (2.63%), Infosys (2.48%), Tata Power (2.23%), Gail India (2.04%), Sterlite (1.84%), Hindalco (1.70%), L&T (1.53%), and Wipro (1.02%).
However, Bharti Airtel firmed up by 3.85%, followed up by Dr Reddy's Lab (1.81%), Maruti Suzuki (1.62%) and Cipla (1.17%).
"The latest inflation print and the present backdrop of a weak monsoon along with the recent rebound in commodity prices including oil, which hold a threat to any softening in inflation, leaves little scope for RBI to effect any policy rate changes on July 31," said Taher Badshah, senior VP & co-head Equities, Motilal Oswal AMC-PMS.
The total turnover declined further to Rs. 1,838.06 crore from Rs. 1,934.89 crore last Friday.
"Profit-booking is likely to continue on rallies. Earnings season has begun with upcoming important results in this week being of Axis Bank, Bajaj Auto, Dr Reddy, Kotak Bank, Reliance and Asian Paints among others," said Rakesh Goyal, senior vice president, Bonanza Portfolio.
FIIs bought shares worth a net Rs. 281.13 crore on last Friday as per provisional data released by stock exchanges.