MUMBAI (Reuters) - The BSE Sensex fell on Monday, snapping four days of gains, due to profit booking in the fast moving consumer goods stocks, led by declines in cigarette maker ITC (ITC.NS) and the country's largest consumer goods maker, Hindustan Unilever (HLL.NS).
Traders attributed the fall to churning of money from the "expensive defensive" to "cheap and rate beneficiaries" like bank and infrastructure shares.
Markets are now also awaiting further news on the progress of the monsoon as well as measures from the government to revive growth.
"Profit booking after a big rally on Friday got exacerbated due to bad cues on monsoon and oil prices," said Ambareesh Baliga, chief operating officer at Way2Wealth Brokers Pvt Ltd.
"Those who have missed on rally can buy on dips provided they keep ears open to (news on) monsoons and steps from finance ministry."
India's crucial monsoon rains were below average last week and failed to cover as much of the country as they should have, the weather office said on its website, fanning concerns about output of crops despite reassurances from weather officials.
The BSE Sensex fell 0.2 percent to 17,398.99 points, after Friday's 2.6 percent rise after European leaders agreed to create a single supervisory body for euro banks.
The Nifty fell 0.01 percent to 5,278.60 points, even as MSCI's broadest index for Asian shares outside Japan rose 0.5 percent.
A raft of upgrades on Indian equities has helped local shares notch up gains in recent sessions.
Morgan Stanley upgraded Indian stocks on Friday to "equalweight" after being "underweight" since the first quarter of 2011.
Morgan Stanley's upgrade came after Deutsche Bank and J.P.Morgan upgraded Indian stocks to "overweight" from "neutral".
Dealers said reports of a higher value added tax on cigarettes by the Uttar Pradesh government weighed on ITC shares.
Hindustan Unilever (HLL.NS) also ended 1.7 percent lower.
IT stocks were also under pressure after Macquarie downgraded the sector to "underweight" from "overweight" citing demand concerns.
Shares in Maruti Suzuki India rose 0.8 percent, bucking the weak trend seen among peers, after reporting 20 percent growth in vehicle sales for the month of June.
Shares in Tata Motors fell 1.9 percent after sales in June declined by 3 percent.
Shares in Adani Enterprises (ADEL.NS) rose 5.7 percent after its Australian chief said it aims to start building its first Australian coal mine in July 2013, at an expected cost of around $4 billion, so it can produce 23 million tonnes a year in its first year.
Editing by Anand Basu