Sensex continues to fall ahead of RBI review

MUMBAI (Reuters) - The BSE Sensex shares fell on Monday, continuing their retreat from record highs hit last week as blue-chips including Dr.Reddy's Laboratories extended falls after disappointing earnings, while caution prevailed a day before the central bank's policy review.

The Reserve Bank of India is expected to keep interest rates on hold after unexpectedly easing monetary policy last month although some analysts expect a potential rate cut.

Falls also tracked lower Asian shares after the latest gauge of China's factory sector activity raised concerns about the world's second-largest economy.

The benchmark Sensex fell 0.21 percent to 29,122.27. It had risen to 29,844.16 on Friday, hitting a record high for a seventh session out of eight, before closing lower for the day.

The Nifty fell 0.13 percent to 8,797.40 after hitting an all-time high of 8,996.60 in the previous session.

(Reporting by Abhishek Vishnoi; Editing by Anand Basu)