By Abhishek Vishnoi
MUMBAI (Reuters) - The BSE Sensex and the Nifty fell more than 1 percent on Friday, marking their third consecutive session of declines, as blue-chips such as Larsen & Toubro slumped on global risk aversion after U.S. President Barack Obama authorised targeted air strikes in Iraq.
Global shares tumbled on Friday on rising worries of another drawn-out conflict in the region. The broader Nifty also closed below its 50-day moving average for the first time since Feb. 21, sparking worries of a further sell-off.
Also, a hawkish stance by the Reserve Bank of India (RBI) in its monetary policy review on Tuesday coupled with sustained selling by overseas investors who are largely responsible for the indexes touching record highs in the previous month, also weighed
Foreign investors sold shares worth $11.92 million on Thursday, provision exchange data shows, totalling sales of $321 million in July so far.
The falls on Friday sent the Nifty down 0.44 percent, for a second consecutive weekly fall.
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"People will continue to book profits on reasons like global uncertainty, and valuations, but there wont be a sell-off," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm.
The benchmark Sensex lost 1.02 percent, or 259.87 points, to end at 25,329.14, also falling 0.6 percent to mark its second straight weekly fall.
The Nifty fell 1.06 percent, or 80.70 points, to end at 7,568.55.
Blue-chips were among the leading decliners.
Larsen & Toubro lost 2.6 percent while HDFC Bank HDBK.NS fell 1.9 percent.
Among other blue-chips, Sesa Sterlite SESA.NS ended down 5.9 percent while Axis Bank lost 2.7 percent.
Reliance Industries fell 0.9 percent and Oil and Natural Gas Corp ended 1.5 percent lower.
Tata Motors TAMO.NS fell 2.1 percent ahead of its April-June earnings on Monday.
Hindalco Industries fell 2.7 percent after its unit Novelis Inc's April-June operating profit lagged some estimates, analysts say.
Nestle India Ltd fell 0.8 percent after April-June margins disappointed.
However, MM Forgings Ltd jumped 13.7 percent adding to its 20 percent gain in the previous session after the company on Wednesday posted its highest ever quarterly revenue and profit in April-June.
(Editing by Sunil Nair)