The benchmark Sensex on Tuesday snapped five days of gains and slipped 60 points as bank stocks fell on expectations rising inflation would increase the chances of an interest rate hike.
The 30-share S&P BSE Sensex started on a positive note and rose to 20,759.58, the highest intra-day level since November 11, 2010. Brokers said the gains came after Reliance Industries posted better-than-expected second-quarter results.
However, the index then fell and ended at 20,547.62, a loss of 59.92 points or 0.29 per cent. The gauge had gained 712 points in the previous five sessions.
The broader CNX Nifty index on the National Stock Exchange lost 23.65 points, or 0.39 per cent, to 6,089.05.
Brokers said sentiment weakened as the wholesale inflation rate climbed to a seven-month-high, raising concerns about a possible increase in the repo rate. With WPI inflation at 6.46 per cent in September, analysts expect the Reserve Bank of India to hike the repo rate by 25 basis points.
They said cautious investors reduced positions in banking and interest rate-sensitive sectors as some of them fell from record highs.
Tata Motors retreated from a record, losing 0.45 per cent to Rs. 389.10. HDFC Bank fell 2.37 per cent to Rs. 651.40, State Bank of India dropped 2.09 per cent to Rs. 1,621.55 and ICICI Bank lost 1.98 per cent to Rs. 975.45.
The banking sector index declined the most, losing 2.59 per cent, followed by the realty index which fell 1.6 per cent. The consumer durables index lost 1.2 and capital goods 0.75 per cent.
Of the 30 Sensex shares, 17 declined.