Observing that India’s growth rate has “repeatedly disappointed” in recent quarters, US-based Fitch Ratings on Tuesday lowered its GDP projection for the current fiscal to 6.7 per cent from its earlier reading of 6.9 per cent three months ago.

Explaining the uncertainty in the economic growth, Fitch says, “it is partly because of one-off factors including the demonetisation and implementation of Goods and Services Tax.”

In its September Global economic Outlook report, Fitch said that the rebound in economic growth has been “weaker than expected” even as it further lowered the GDP projection for 2018-19 to 7.3 per cent from 7.4 per cent. However, the growth is likely to pick up over the next two years on the back of gradual implementation of the structural reforms agenda and higher disposable income.

Recent moves by the government should help support the growth outlook and enhance business confidence. Fitch mentions two-year plan worth `2.11 lakh crore to recapitalise banks as it expects the capital infusion would facilitate lenders to address the capital shortage that has hindered their lending capacity. The `6.9 lakh crore road construction plan may also encourage investment growth outlook for India.

Fitch’s report coupled with Wednesday’s bi-monthly review of monetary policy made investors extra-cautious on Tuesday forcing them to further cut their risky exposures or unwind positions in select stocks. This led to further decline in 30-share Sensitive Index of Bombay Stock Exchange and 50-scrip Nifty of National Stock Exchange.

Analysts say another negative that impacted day’s trade was slump in services sector PMI for November which fell to 48.5 from 51.7 in October. The reason for decline, analysts say, is rising prices which hit foreign and domestic demand. “After initial confusion among firms over the pricing of their products, firms now are better adjusted to the GST and are gradually passing higher input costs to end-consumer. That, however, has hurt demand.”

Trade in D Street continued to be bearish as benchmarks of BSE and NSE displayed downside bias. Dalal Street players are looking forward to “final word” from RBI on Wednesday. The market, analysts say, has already factored in status quo on rate front as it suggests further repurchase or repo rate cut in near future or February policy review. Banking sector withstood profit booking.

The Nifty Bank topped intra-day at 25,217.70 (+142.6 points) but ended after paring some gains at 25,124.85 (49.75) points.

The Sensex closed  32,802.44 (-67.28) points down 0.20 per cent. Nifty at 10,118.25 (-9.50) points was down 0.09 per cent.  In Sensex, seven shares ended up, 23 down and one unchanged. For Nifty, the ratio was 17:32:1. Gainers in BSE benchmark included SBI `320.5 ( 2.14 per cent), Airtel `496.75 (1.23 per cent), RIL `912.30 (1.20 per cent) and Kotak M Bank `1,002.55 (0.27 per cent). Losers were Maruti `8,495 (-0.21 per cent) & Axis Bank `531.45(-0.64 per cent).