Sensex slips 109 points as RBI decision looms

The BSE Sensex shed almost 109 points to close below the key 35,000-mark today as trading activity was on a low ebb ahead of RBI's policy announcement tomorrow.

The Reserve Bank's three-day monetary policy review meeting kicked off yesterday amid speculation that it may hike the key interest rate for the first time since January 2014 due to firming inflation.

The 30-share Sensex stayed in the negative terrain for most of the session, touching a low of 34,784.68. It finally finished at 34,903.21, down 108.68 points or 0.31 per cent.

The gauge had lost 310.49 points in the previous two sessions.

The broader NSE Nifty too dropped by 35.35 points, or 0.33 per cent, to end at 10,593.15, after moving between 10,633.15 and 10,550.90.

Interest rate sensitive realty, banking and auto stocks remained under pressure.

Trading mood was also impacted after PMI data showed that India's services activity contracted for the first time in three months in May as new business orders stagnated and cost pressure intensified amid higher fuel prices.

Meanwhile, domestic institutional investors (DIIs) sold shares worth a net Rs 712.41 crore, while foreign portfolio investors (FPIs) bought equities to the tune of Rs 2,354.03 crore yesterday, as per provisional data released by the stock exchanges.