Sensex heading for three-week closing low; ITC slumps

Reuters Market Eye - The BSE Sensex falls nearly 1 percent, heading towards its lowest close since June 4, as index heavyweight ITC slumps on tax hike worries while the Iraq conflict and foreign investor sales-led risk aversion also weigh.

The BSE Sensex is down 0.52 percent, while the broader Nifty is 0.58 percent lower, also heading towards their fourth consecutive day of declines.

India's biggest cigarette manufacturer ITC Ltd slumps 5.5 percent on a media report that government may raise taxes on cigarettes aggressively in the upcoming budget in July, dealers say.

Among other blue-chips, Kotak Mahindra Bank is down 3.8 percent while Infosys falls 2.8 percent.

Brent crude rose towards a nine-month high above $115 a barrel on Monday amid concerns of possible disruptions to supply from Iraq where Sunni insurgents seized control of more towns over the weekend.

Overseas investors sold Indian shares worth 2.20 billion rupees ($36.85 million) on Friday, provisional exchange data shows.

(Reporting by Abhishek Vishnoi)