Sensex, Nifty fall for 2nd consecutive session

MUMBAI, Dec 2 (Reuters): The BSE Sensex and Nifty fell for a second consecutive session on Tuesday, as software stocks declined on rupee strength and as investors booked profits after the Reserve Bank of India (RBI) kept interest rates unchanged, although signalling a potential easing by early 2015.
The RBI held interest rates steady, as widely expected, at a policy review on Tuesday, and said it could ease monetary policy early next year provided inflationary pressures do not reappear and the government controls the fiscal deficit.
Falling inflation, slowing growth in the previous quarter, plunging oil prices, China's surprise easing and government talk of lower rates had raised expectations, although only 4 out of 45 economists in a Reuters poll said the RBI would cut rates.
"By not cutting rates the RBI has remained consistent in their policy objective of decisively bringing down inflation and long-term inflationary expectations," said Arvind Sethi, managing director of Tata Asset Management Ltd.
A rate cut would be likely around the budget, if the government is able to hold the deficit at around 4.1 per cent, Sethi added.
The 50-shares Nifty closed down 0.36 per cent at 8,524.70, after hitting a record high of 8,623 in the previous session.
The benchmark BSE Sensex ended 0.4 per cent lower at 28,444.01, falling for a second straight session.
Blue-chips including software services exporters led the declines. Infosys fell 2.2 per cent while Tata Consultancy Services ended down 1.3 per cent.