Led by metal, power and auto shares, the Sensex today lost 129 points to end at 17,391.98 -- its lowest closing in over a week -- on fresh weakness in the rupee and poor global sentiment.
Brokers also said worries over deficient rains fuelled speculation about scarcity of foodgrains and price rise, dashing hopes of investors who were expecting the RBI to cut interest rates in the July 31 monetary policy review meeting.
The BSE benchmark index opened on a weak note after US jobs data and easing of inflation in China sparked off worries over global economic growth and touched the day's low of 17,343.55 after rupee slipped below the 56-level a dollar.
Losses in Asia's stock markets and lower opening in Europe an indices kept Indian shares in the negative zone.
The mood was further soured by comments from Prime Minister's Economic Advisory Council chief C Rangarajan who said the Reserve Bank will find it difficult to cut interest rates in its monetary policy review later in this month in absence of softening of inflation.
As many as 27 constituents led by Hero MotoCorp, Tata Steel, Bajaj Auto and Tata Power of the 30-share Sensex shed value as the index closed at 17,391.98, down 129.14 points or 0.74 per cent. The index had closed at a lower level on June 28 when it settled at 16,990.76.
The overall market breadth was weak with over 1,770 stocks out of the 2,971 traded closing with losses.
Experts feel investors are worried over the April-June earnings which will start pouring in from later this week.
"Expectations from results are not very high in our view," said Dipen Shah, Head-Fundamental Research, Kotak Securities.
The 50-share NSE Nifty fell by 41.80 points, or 0.79 per cent to 5,275.15 led by stocks of metal, power and capital goods sectors.