The BSE Sensex snapped 4-session winning streak on Thursday and fell over 243 points as banking stocks fell after RBI failed to lower key rates, even as the government projected 7.6 per cent growth for next fiscal.
Markets were also impacted by uncertain political situation arising out of Trinamool Congress Chairperson Mamata Banerjee, a key government ally, seeking the removal of Railway Minister Dinesh Trivedi after he proposed hike in fares in Rail Budget on Wednesday, brokers said.
The Bombay Stock Exchange 30-share barometer lost 243.45 points, or 1.36 per cent to close at 17,675.85 after touching a low of 17,622.13 points. In last four sessions, it had gained over 773 points.
Overall, 22 out of 30 index-based stocks closed with losses while others settled in positive territory.
Similarly, the NSE 50-issue Nifty, dipped below 5,400 points level by falling 83.40 points or 1.53 per cent to 5,380.50.
Investors were expecting the Reserve Bank to cut lending rates at its monetary policy review today to boost growth.
Selling was strong although the Economic Survey 2011-12, tabled in Parliament on Thursday, projected higher economic growth of 7.6 per cent for the next fiscal.
Besides, investors adopted a cautious approach ahead of the Union Budget 2012-13 to be presented on Friday, as RBI said inflation risk has increased because of surge in crude oil prices, high fiscal deficit and the rupee's appreciation.
The losses were more pronounced in the financial, realty and infrastructure sectors but gains in heavyweights Tata Motors, Tata Steel, TCS, HUL, NTPC, Sun Pharma and Wipro cushioned the fall.