Key equities indices in India fell again Friday as data on retail inflation, which showed a marginal increase, belied expectations of a rate cut next month, pulling down interest-sensitive sectors like banking, capital goods and automobile in particular.
The 30-scrip BSE Sensitive Index (Sensex) closed Friday's trade down 427 points or 1.48 percent.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed the day's trade in the red. It closed trade 128.25 points or 1.46 percent down at 8,647.75 points.
Analysts said market sentiment was affected due to the marginal increase in CPI (consumer price index) number for February 2015 which stood at 5.37 percent from 5.19 percent for January 2015.
The analysts further said that the markets discounted India's factory output in January which gained momentum rising 2.6 percent from a growth of 1.7 percent during December 2014.
On Thursday, the Sensex gained 271.24 points or 0.95 percent, breaking a consecutive three-day losing streak. In earlier three sessions this week, the markets had plunged on the back of rapid increases in US non-farm payroll data which might lead to an increase in inflation.
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This can further make the US Federal Reserve raise interest rates sooner than previously expected.
On Monday the BSE Sensex plunged 604 points or 2.05 percent. It had closed Tuesday's trade lower by 135 points or 0.47 percent. On Wednesday, the Sensex closed 51 points or 0.18 percent down.
On Friday, the Sensex of the S&P BSE which opened at 29,134.93 points, closed the day's trade at 28,503.302 points, down 427.11 points or 1.48 percent from the previous day's close at 28,930.41 points.
The Sensex touched a high of 29,183.76 points and a low of 28,448.48 points in the intra-day trade.
All sector-based indices of the BSE closed in the red. Heavy selling was observed in interest-sensitive sectors like capital goods, banks and automobile.
Other sectors like healthcare, fast moving consumer goods (FMCG), metal, information technology (IT) and oil and gas too came under heavy selling pressure.
The BSE S&P capital goods index was down 457.56 points, bank index was lower by 422.56 points, automobile index came down by 323.31 points, healthcare index fell 216.33 points, FMCG index declined by 160.33 points, IT index decreased by 118.11 points and oil and gas index lost 118.08 points.
"The CPI (consumer price index) number is not encouraging enough to expect more rate cut in the medium-term. Also fourth-quarter FY15 result expectation has been discounted lower," said Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.
"We continue to believe that the important trigger for India will depend on budget session outcome. The immediate consolidation trend will depend on what can be accompanied in the first session of the parliament to be ended on March 20," Nair added.
The major Sensex gainers on Friday were: Bharti Airtel, up 0.72 percent at Rs.400.35; ONGC, up 0.56 percent at Rs.313.85 and NTPC, up 0.03 percent at Rs.159.55.
The losers were: BHEL, down 3.41 percent at Rs.254.60; Larsen and Toubro (LT), down 3.11 percent at Rs.1,693.55; Wipro, down 2.64 percent at Rs.637.50; Bajaj Auto, down 2.64 percent at Rs.2,022.90; and Axis Bank, down 2.51 percent at Rs.570.10.
Among the Asian markets, Japan's Nikkei went up by 1.39 percent, Hong Kong's Hang Seng closed higher by 0.11 percent and China's Shanghai Composite Index, gained by 0.73 percent.
In Europe, London's FTSE 100 was down by 0.10 percent, Germany's DAX Index was also down by 0.10 percent and France's CAC 40 was lower by 0.09 percent at the closing in the Indian markets.