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The Bombay Stock Exchange benchmark Sensex lost 139 points as funds resorted to intense selling after food inflation inched closer to double digits triggering fears that the Reserve Bank will hike interest rates again.
The 30-share index Sensex, which had lost 213 points in the previous session, further declined by 138.65 points to 16,146.33.
In a volatile trade, the key index moved between 16,373.84 and 16,104.34 points.
Meanwhile, food inflation soared to 9.80 per cent for the week ended August 13 from 9.03 per cent in the previous week, sparking further selling even as the global trend was positive.
Brokers said selling pressure was also heavy on account of expiry of August derivatives series.
Similarly, the broad-based National Stock Exchange index Nifty lost 49.30 points to 4,839.60.
The pull-down was led by Reliance Industries and Infosys, both together command 21 per cent weight in Sensex. Reliance Industries fell 0.87 per cent and Infosys 2.68 per cent.
Technology shares fell the most and the sectoral index lost 2.07 per cent as investors were concerned that global slowdown will hurt corporate earnings. Indian software exporting companies get more than 50 per cent of their revenues from the US and Europe.
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