MUMBAI (Reuters) - The Nifty fell for a sixth consecutive day to hit its lowest level in 4-1/2 weeks as worries about weaker-than-average monsoon and foreign selling continued to hit blue chips such as Housing Development Finance Corp .
Sentiment was also hurt by weaker Asian shares as slowing Chinese imports increased concerns about the world's second largest economy, while strong U.S. jobs data was seen raising the chance for an earlier U.S. interest rate hike this year.
Foreign institutional investors have sold in three of the last four trading sessions, withdrawing about a net $210 million from Indian equities, regulatory and stock exchange data showed.
Overseas funds had withdrawn a net 57 billion rupees ($889.9 million) from shares last month, when markets were gripped by worries about a potential retrospective minimum alternate tax (MAT).
"Largely, the exit is being taken by some of the global traders due to a lot of uncertainty about the monsoon rains, which is being worsened by negative sentiment due to tax worries and slow pace of reforms," said Deven Choksey, managing director at K R Choksey Securities.
The Nifty fell as much as 1 percent to a session low of 8,033.75, its lowest since May 7. It was down 0.9 percent at 1:50 p.m., heading for its sixth consecutive losing session.
The Sensex also fell 0.9 percent.
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Lenders were among the day's leading decliners given worries that a weaker-than-expected monsoon will prevent the Reserve Bank of India from cutting interest rates again this year after easing it by a total of 75 basis points so far in 2015.
Punjab National Bank was down 4.1 percent, while Bank of Baroda fell 2.8 percent.
Index heavyweight Housing Development Finance was down 2.3 percent, while Reliance Industries Ltd lost 2.4 percent.
However, Bhushan Steel Ltd jumped 16.5 percent, extending Friday's 20 percent gain after some of its creditors approved extending its loans for a tenure of 25 years.
($1 = 64.0500 rupees)
(Reporting by Himank Sharma; Editing by Anand Basu)