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Sensex ends below 21000, falls for third day

The BSE Sensex declined over 1 per cent on Thursday, its third straight loss after hitting a record high on Monday. The Sensex ended below the key 21,000 levels having lost around 400 points over the previous three sessions.

The Sensex fell 246 points to close at 20,926. The broader Nifty fell 71 points to end at 6,237, while the rupee traded 0.7 per cent lower at 61.65 per dollar.

Traders blamed profit-taking after recent gains and caution ahead of inflation data behind the weakness in the markets.

Rate sensitive stocks fell. Banking stocks declined 1.4 per cent, while autos slumped 2.2 per cent. Tata Motors slumped 4.6 per cent and was the top Nifty loser. Tata Motors shares have fallen 6.7 per cent (as of Wednesday's close) after hitting a record high of 405 on November 28.

ICICI Bank ended 2.2 per cent lower, while Bajaj Auto fell 2.3 per cent.

Consumer prices were forecast to have risen an 10 per cent annually last month, a Reuters poll showed, barely changed from the 10.09 per cent clocked in October.

Weakness in global markets also weighed on sentiments. Asian shares slipped to a 2-1/2 month low on Thursday on heightened expectations that the Federal Reserve may act sooner than later to unwind its stimulus after a provisional budget deal in Washington eased some of the fiscal drag on the US economy.

Profit taking:

The recent rally was attributed to the BJP's strong show in the recently held state polls, which bolstered views that the main opposition party, seen as more business friendly, could form a government after general elections due by May 2014.

Sajiv Dhawan of JV Capital Services told NDTV that sentiments had changed because of an event that may happen six months later i.e. a change in government, but fundamentals have not changed.

"It's better to take profits, lighten up positions and keep cash in hands. Valuations are not cheap," he added.

(With inputs from Reuters)