Mumbai: Falling for the second straight day, the benchmark BSE Sensex on Tuesday slipped 47 points to 27,831.54 mainly on heavy selling in blue-chip stocks like HDFC, Lupin and Sun Pharma after Moody's slashed India's growth forecast.
Moreover, a sharp correction in Chinese equities also hit sentiment. The BSE metal index plunged close to 2 percent on fears that China's economy may be losing momentum.
Warning that slow reforms pace could dent growth, Moody's Investors Service on Tuesday cut India's growth forecast for this fiscal to around 7 percent from 7.5 percent projected earlier, citing below-normal rainfall.
Besides, worries over deficient rains which has widened to 10 percent and is projected to rise to 12 percent by the end of monsoon season next month, weighed too.
Globally, Asian shares were largely in red with Shanghai index slumping by 6.15 percent, its biggest fall in 3 weeks.
European shares were also lower in their early trade.
Resuming higher, the Sensex reclaimed the 28,000-mark in early trade and touched the session's high of 28,040.73 on the back of sustained capital inflows.
However, the index failed to hold onto gains towards the middle of session and slumped to a low of 27,747.40 before ending at 27,831.54, a fall of 46.73 points or 0.17 percent.
The 50-share NSE Nifty also dropped by 10.75 points or 0.13 percent to close the day at 8,466.55.
Out of 30-share Sensex pack, 22 closed in the red.
Among Sensex constituents, GAIL suffered the most by plunging 4.43 percent, followed by Coal India 4.20 percent.
Cipla, Vedanta, Lupin, Sun Pharma, Hindalco, Tata Motors, ONGC, Bharti Airtel, HDFC, Wipro, ICICI Bank, ITC, RIL, NTPC, Hero MotoCorp and HDFC Bank were also among losers.
However, shares of Tata Steel, Maruti Suzuki, Infosys. TCS, SBI, L&T, M&M and Dr Reddy's ended in the positive zone.
Sectorwise, the BSE metal index suffered the most by falling 1.92 percent, followed by healthcare by 0.57 percent, PSU by 0.47 percent and realty 0.32 percent, banking 0.20 percent and power 0.17 percent.
In broader markets, small-cap and mid-cap indices ended up to 0.85 percent higher as investors widened positions.
Foreign Portfolio Investors bought shares worth Rs 142.34 crore yesterday as per provisional data.
