The Bombay Stock Exchange's (BSE's) benchmark index, Sensex, fell 4.3 per cent and the S&P CNX Nifty declined 4.2 per cent in Friday's trading session. Only the Shanghai Composite index fell more, by 5.3 per cent, on Friday.
The last six weeks have shown a similar trend. The markets have closed lower each day since May 16, with the Sensex falling by 20.8 per cent and the Nifty declining by 19.8 per cent.
The Shanghai Composite index was the only index to fall more than India's benchmark indices during the same period, declining by 24.2 per cent. The crude oil prices have moved up by a breathtaking 14.78 per cent, while the rupee has depreciated by 0.75 per cent in the last six weeks.
No wonder that foreign institutional investors (FIIs) have shifted focus to the resource-rich Latin American economies and the West Asian markets.
FIIs have sold equities worth Rs 18,159 crore in the last six weeks alone, while domestic institutional investors bought equities worth Rs 13,241 crore, according to data from the exchanges.
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Realty has been the worst affected sector, with the BSE Realty index losing nearly 40 per cent in the last six weeks compared to the Sensex's fall of 20.8 per cent.
Week ahead
Things don't look any better for the Indian markets this week either since crude oil has already touched the $142-mark.
"The scenario looks pretty bleak. Indian markets will closely track the Asian markets on Monday," said Anita Gandhi, head-institutional equities at domestic broking firm Arihant Capital Markets.
The Dow Jones Industrial Average ended Friday's trading just shy of 20 per cent below its record high in October and is on cusp of entering an official bear market.
Global equities are heading for their worst first-half performance in 26 years in a week wherein oil surged to a record and there were renewed worries about the health of the financial system and global growth.
The benchmark US index, Dow Jones Industrial Average, ended down by 106.91 points or 0.93 per cent on Friday.
The wholesale price index data on Friday showed the annual inflation rate rose to a new 13-year high of 11.42 per cent for the week ended June 14, compared with 4.13 per cent in the corresponding week a year ago.
Most market players do not expect inflation to come down any time soon, with some even expecting the actual inflation to be higher than the wholesale price index data revelations.