The crude oil prices topped $135 a barrel and the Dow Jones ended down nearly 2 per cent overnight. The Sensex closed below 17000 for the first time since May 14 at 16907.11, down 336.05 points, or 2 per cent, from Wednesday. It moved between 16863.38 and 17104.59 during the day.
The Nifty closed at 5025.45, down 92.20 points, or 1.8 per cent, after moving between 5010.70 and 5118.90. The combined exchange turnover was Rs 196 billion, compared with Rs 223 billion in the previous session.
Bank, realty and auto shares fell amid fears that Reserve Bank of India would resort to more liquidity tightening measures as inflation threatens to remain above the central bank's tolerance level of 5 per cent.Punjab National Bank and Tata Motors fell 4 per cent each to Rs 534 and Rs 661 respectively. Unitech lost 3 per cent to end at Rs 274.
Suzlon Energy declined 6 per cent to Rs 291 amid concerns the company's margins would remain weak in coming quarters on higher employee and other overhead costs.
Technology shares gave up gains on profit sales after the rupee breached the 43 mark. Cairn India, too, ended lower. Dr Reddy's Laboratories, however, held onto gains following reports that it will divest 49 per cent stake in its wholly-owned subsidiary Macred India to UK-based Johnson Matthey.
