MUMBAI (Reuters) - The BSE Sensex and Nifty edged down in choppy trade on Tuesday as investors pared positions on risk aversion after a steep fall in Chinese equities, and on worries at home that the monsoon may be deficient.
Asian shares fell to a two-year low on worries that cooling demand in China will weigh on the trade-reliant region. The Shanghai Composite Index closed down 6.1 percent at 3,749.12 in its biggest daily decline since July 27, snapping a three-day winning streak.
India's monsoon deficit has widened to 10 percent as a strengthening El Nino weather pattern trimmed rainfall, the weather department said on Monday, raising fears of the first drought in six years.
Meanwhile, ratings agency Moody's Investors Service cut its forecast for India's economic growth to around 7 percent this year from 7.5 percent because of lower-than-expected rainfalls in the monsoon season.
"People are not keeping positions at higher levels because of monsoon uncertainty, they are booking profits," said Alex Mathews, head of research at Geojit BNP Paribas.
The Sensex was down 0.21 percent and the Nifty was lower 0.23 percent, heading for their second consecutive session of losses.
Almost all sectors were in the red, with only IT and industrial stocks holding out.
Banking shares weighed heavily on the indexes, with HDFC Bank
ITC
(Reporting by Karen Rebelo and Abhishek Vishnoi; Editing by Subhranshu Sahu)
