Sensex falls more than 1 percent; mid caps tumble

MUMBAI (Reuters) - The BSE Sensex fell more than 1 percent on Wednesday, as investors continued to pare back expectations of any additional rate cut this year after India forecasted lower-than-expected rainfalls during the monsoon season.

The Reserve Bank of India (RBI) cut interest rates on Tuesday but made any additional easing contingent on food prices - a worry for investors given that India cut this year's monsoon forecast to 88 percent of the long-term average.

Shares were also hit by market speculation that some companies, largely mid caps, were facing repayment defaults. Jaiprakash Associates Ltd slumped 20.7 percent, while Unitech Ltd lost 35.7 percent even as both companies denied that they were facing such issues.

 

The BSE Sensex fell 1.3 percent to 26,837.20, its lowest close since May 7.

The Nifty fell 1.2 percent to 8,135.10, its lowest close since May 12.

(Reporting by Rafael Nam; Editing by Subhranshu Sahu)