The Sensex tumbled for the third straight session to close below the 60,000-mark on Friday, ending the first week of the new year with losses amid concerns over elevated inflation and continued monetary policy tightening.
Unabated foreign fund outflows and a weakening rupee added to the gloom, traders said.
The 30-share BSE Sensex slumped 452.90 points or 0.75 per cent to finish at 59,900.37. The broader NSE Nifty went lower by 132.70 points or 0.74 per cent to end at 17,859.45.
TCS was the top laggard in the Sensex pack, shedding 2.97 per cent, followed by IndusInd Bank, Bajaj Finserv, Tech Mahindra, Bajaj Finance, Infosys and Kotak Mahindra Bank.
Only five counters closed higher -- Mahindra & Mahindra, Reliance Industries, Nestle India, ITC and Larsen & Toubro, rising up to 1.06 per cent.
"Investor risk sentiment took a blow post the release of the FOMC meeting minutes, which indicated further rate hikes in 2023 to tame inflation. The market already remains sensitive to FIIs selling and IT stocks traded with deep cuts ahead the release of corporate earnings next week as the growth is anticipated to be muted," said Vinod Nair, Head of Research at Geojit Financial Services.
On a weekly basis, the Sensex lost 940.37 points or 1.55 per cent, while the Nifty declined 245.85 points or 1.36 per cent.
"The Indian equity markets have begun the new year on a slightly cautious note, in line with the global markets, continuing the trend visible in December 2022. While expectations remain of softer rate tightening by the global central banks from hereon, concerns remain on the overall economic environment amidst the high interest rates and sticky core inflation.
"Indian markets have been one of the best performing markets globally in CY22... However, in the near term, the markets seem to be running into a few headwinds -- record high valuation premium to EMs, potential slowdown in exports on the back of global slowdown, and Fixed Income emerging as a viable investment option," said Milind Muchhala, Executive Director, Julius Baer India.
In the broader market, the BSE smallcap gauge fell 0.73 per cent and midcap index declined 0.72 per cent.
Among sectoral indices, teck declined 1.86 per cent, IT dipped 1.77 per cent, metal (1.28 per cent), services (1.11 per cent), bankex (1.04 per cent) and financial services (1.03 per cent).
FMCG was the only gainer.
Elsewhere in Asia, equity markets in Seoul, Tokyo and Shanghai ended in the green, while Hong Kong settled lower.
Equity exchanges in Europe were trading on a mixed note in mid-session deals. Markets in the US had ended lower on Thursday.
International oil benchmark Brent crude climbed 0.15 per cent to USD 78.81 per barrel.
The rupee pared initial gains and settled 9 paise lower at 82.71 (provisional) against the US dollar on Friday, tracking a rebound in the greenback overseas and a muted trend in domestic equities.
Continuing their selling spree, foreign institutional investors (FIIs) offloaded shares worth a net Rs 2,902.46 crore on Friday, according to exchange data.
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