BENGALURU (Reuters) – Indian shares inched lower on Tuesday, retreating from Monday’s record close, as investors awaited the central bank’s policy meet outcome later this week.

India’s economy grew at its slowest pace in more than four years in the January-March period, according to data released last week, raising prospects of a rate cut by the Reserve Bank of India (RBI) at its June 4-6 policy meeting.

The rupee, meanwhile, strengthened as much as 0.33% to its strongest level since April 15.

The broader Nifty was down 0.32% at 12,051.80 as of 0455 GMT, while the benchmark Sensex fell 0.27% to 40,162.19.

Trading volumes were thin ahead of Wednesday’s market holiday. On the NSE index, over 95,000 shares changed hands in early trade, compared with the 30-day average of 388 million shares.

“Till the RBI policy and the budget is out, markets will be hoping for a lot of reforms,” said Deepak Jasani, analyst at HDFC Securities.

“To what extent those hopes are fulfilled, we don’t know… the index will be mildly bullish till these two events are done.”

India will announce its full-year budget for the year ending March 2020 on July 5 — an event expected to provide a glimpse into the newly-formed government’s plans for the economy

Among shares, Tata Motors Ltd added 1.55%, while Mahindra and Mahindra Ltd advanced 0.7%. The Nifty Auto index rose 0.12%.

The Nifty IT index fell 1.12%, with Tata Consultancy Services Ltd dropping over 2% — its sharpest intraday fall in over four weeks. Rivals HCL Technologies Ltd and Infosys Ltd fell as much as 2.17% and 1.5%, respectively.

Shares of ICICI Bank Ltd and Axis Bank Ltd fell over 1% and 0.8%, respectively, after Fitch Ratings downgraded both the banks’ Long-Term Issuer Default Rating.