By Indulal PM
MUMBAI (Reuters) - The BSE Sensex and the Nifty fell for a second consecutive session on Wednesday, retreating from record highs hit early this week, as worries that the Federal Reserve would raise interest rates sooner than expected hit blue-chips such as Infosys.
Falls tracked lower global shares after a paper from the San Francisco Federal Reserve Bank released on Monday argued that investors could be underestimating the speed at which the U.S. central bank might raise interest rates.
Foreign investors have been a key driver of this year's record-setting rally in Indian shares, and as of Tuesday had been net buyers for a seventh consecutive session, bringing their total for the year to $13.94 billion.
Caution is also expected to prevail ahead of the consumer inflation data due on Friday, the last one before the Reserve Bank of India's policy review on Sept. 30.
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"Today's fall is more of a technical correction, which will give a better entry for fresh participants. A larger amount of capital investment is awaited. We are relatively more positive towards the market," said Deven Choksey, managing director, KR Choksey Securities.
The benchmark BSE Sensex closed down 0.76 percent at 27,057.41, retreating further from a record high of 27,354.99 hit on Monday.
The broader Nifty fell 0.72 percent to 8,094.10, moving away from its record high of 8,180.20 hit on Monday.
Blue-chips, which have traditionally attracted the bulk of foreign investments, led falls. Reliance Industries Ltd
ITC Ltd
State-run oil marketing companies ended lower on profit-taking. Bharat Petroleum Corp Ltd
Among other stocks, infrastructure companies declined for the second day. Larsen & Toubro
Among gainers, ICICI Bank Ltd
Shares in Wockhardt Ltd
(Reporting by Indulal PM; Editing by Subhranshu Sahu)