Sensex snaps 2-day upmove; down 71 pts as FMCG, banks fall

The BSE benchmark index, which had gained 171 points in last two trading sessions, opened higher and was choppy for the most part of the trading session. However, in the last half an hour, selling pressure was pronounced and the Sensex finally closed 70.99 points down at 17,657.21.

The 30-share index was dragged by ITC that dropped 3.6 per cent as rising commodity prices and less rains might hurt rural incomes, said traders. Overall, 20 stocks in Sensex dropped while 10 ended with gains.

Private lenders ICICI Bank and HDFC Bank fell around 1.2 per cent each on concerns that food inflation, a key metric watched by the RBI, hasn't softened even as WPI data for July showed signs of easing.

Metal stocks like Hindalco, Sterlite and Tata Steel fell in 2-3 per cent range on concerns of lower Chinese demand.

Sensex's losses would have been higher if it was not gains in Hero MotoCorp, M&M and RIL that gained 2 per cent each.

Brokers said the market sentiment turned bearish as investors are worried whether key economic reforms to revive GDP growth will occur soon.

They added that some foreign investors were seen booking profits from the recent two days of gains, besides a weakening global tend on concerns of deepening Eurozone debt crisis.

The 50-share NSE index Nifty lost 17.40 points, or 0.32 per cent to 5,362.95.