REUTERS - The BSE Sensex edged lower on Tuesday, heading for a fourth consecutive session of losses after data showed stronger-than-expected consumer inflation, while global markets remained weak ahead of central bank meetings and the Brexit referendum.
Investors have been on edge as they await the outcome of the U.S. Federal Reserve's two-day meeting that begins later in the day and worries over a referendum in Britain next week about whether to exit the European Union.
Sentiment in India was further hit after data late on Monday showed India's annual consumer price inflation rose to a near two-year high of 5.76 percent in May, while data on Tuesday showed stronger-than-expected wholesale price inflation.
The Reserve Bank of India last week kept interest rates on hold, pinning any further easing on the trajectory of consumer inflation. The central bank holds its next review in August.
"Markets would be taking cognisance of the fact that whatever little hopes people had for monetary easing are dashed now," said Jay Shankar, chief economist and director, Religare Capital Markets.
"You may see some amount of volatility coming into the currency as well as financial market because London still remains one of the financial capitals of the world. Many banks have headquarters there, that will have a bearing on profits of a lot of companies that are exposed to the pound," Shankar added.
The broader NSE Nifty was down 0.36 percent at8,081.35 as of 0822 GMT.
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Volumes were far below the 30-day moving average.
The benchmark BSE Sensex was 0.19 percent lower at 26,346.57.
Software services exporters were among the leading decliners. Infosys Ltd fell 1 percent while Tata Consultancy Services Ltd lost 0.92 percent.
However, banks rose, sending the Nifty bank index up as much as 0.60 percent after the RBI on Monday relaxed guidelines for lenders restructuring large stressed loans, in a move that could allow banks to more effectively manage bad loans.
Punjab National Bank was up 5 percent, while Bank of India and State Bank of India gained over 2 percent each.
Meanwhile, DLF Ltd rose as much as 2.8 percent after a newspaper report said the company got $1 billion in bids for a 40 percent stake in its commercial property unit, citing sources familiar with the matter.
(Reporting by Tanvi Mehta in Bengaluru; Editing by Sunil Nair)