RBI Governor Raghuram is widely expected to announce this year's fourth rate cut tomorrow and expectations for the same have further increased after the US Fed's status quot.
Expectations are also fuelled by retail inflation dropping to 3.66 percent in August and economy expanding at a slower pace of 7 percent during the same month.
Vinod Nair Head-Fundamental Research at Geojit BNP Paribas Financial Services said, "We are in a wait-and-watch scenario ahead the RBI policy meet. We believe that the market has already considered a rate cut of 25 basis points."
Investors, meanwhile, were spooked by Europe, where shares were in deep red after mining major Glencore slumped to a record low on depressed commodity prices.
Consequently, the BSE metal index fell by more than 2.50 percent. Besides, auto shares tumbled 1.74 percent.
Moreover, mixed Asian markets after profits at China's major industrial companies saw their biggest declines in four years last month added to the subdued mood.
After opening higher at 25,922.71, the BSE Sensex advanced to a high of 25,936.89 largely as investors expanded positions following beginning of October series.
However, the barometer succumbed to profit-booking and slipped to a low of 25,593.56 before ending at 25,616.84, a loss of 246.66 points or 0.95 percent.
This is index's weakest closing level since September 11 at 25,610.21.
On similar lines, the 50-share NSE Nifty dipped below the crucial 7,800-mark and settled down 72.80 points or 0.93 percent at 7,795.70. It shuttled between 7,893.95 and 7,787.95.


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