The BSE benchmark, Sensex, snapped a three-week rally by slipping 263 points in the

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week as cautious investors booked profits following hardening of interest rates and increasing volatility in global markets.

Capital goods, oil and gas, realty and power sectors were the major losers of the week.

Foreign funds bought shares worth Rs 8,109.64 crore this month (till July 29), absorbing selling by domestic institutional investors.

The Reserve Bank, at its Q1 monetary policy review on July 27, raised key short-term interest rates for the fourth time this year to curb inflation. The central bank also raised its economic growth forecast.

The RBI raised GDP forecast to 8.5 per cent for the year ending March 2011 from 8 per cent earlier.

The Sensex fell 262.69 points, or 1.45 per cent, to end at 17,868.29 from its last weekend's level. The 30-share index had gained by 670.03 points, or 3.84 per cent, over the previous three weeks.

The 50-unit S&P CNX Nifty also shed 81.50 points, or 1.5 per cent, to settle at 5,367.60.

India's largest car maker by sales Maruti Suzuki was the biggest loser from the Sensex pack. It slipped 11.79 per cent to Rs 1198.15 after the auto major's net profit declined 20.2 per cent.