"Inflation continues to remain high,'' said Jayesh Shroff, who helps manage $7.5 billion at SBI Asset Management in Mumbai. "Until oil comes down to at least $110 a barrel, inflation will be difficult to manage,'' he said.
The Sensex, fell 197.54, or 1.3 per cent, to 15,572.18. The benchmark dropped 5.1 per cent this week, the most since the week ended April 6. The S&P CNX Nifty Index on the National Stock Exchange fell 49.15, or 1.1 per cent to 4,627.80.
Wholesale prices rose 8.24 per cent in the week ended May 24, accelerating for a seventh week, the commerce ministry said on Friday. Analysts had forecast inflation at 8.29 per cent.
State-run refiners were the worst performers on the Bombay Stock Exchange's oil and gas index this week after the government raised prices on June 4. Increases in petrol, diesel and cooking gas prices may add between 0.5 and 0.6 percentage point to wholesale prices, Oil Secretary MS Srinivasan said.
ICICI, the nation's second-largest lender, fell on Friday by 1.1 per cent to Rs 769.40. State Bank of India, the biggest, slid 1.4 per cent, to Rs 1,335.20. Housing Development Finance Corp, the mortgage lender partly owned by Citigroup Inc, declined 1.8 per cent to Rs 2,349.45.
Overseas investors sold a net Rs 825 crore ($193 million) of Indian shares on June 4, according to the nation's stock market regulator.
Cairn India rose Rs 22.75, or 8.6 per cent, to Rs 286.85, its biggest gain in almost three weeks. Sri Lanka, which imports all its oil requirements, awarded exploration rights for an offshore block to Cairn India, the first given by the island nation after competitive bids.
Indiabulls Real Estate added Rs 18, or 4.5 per cent, to Rs 422.35, its biggest advance since April 25. India's fourth-biggest developer by market value rose the most in six weeks after investors bid for all the shares offered in a delayed sale by its property trust in Singapore.
The sale received bids for 1.8 times the number of shares offered to institutional investors, allaying concern that a decline in land prices and sell-off in property stocks would deter buyers.
SpiceJet jumped Rs 4.55, or 14 per cent, to Rs 35.95, its biggest advance since December 28. Reliance Anil Dhirubhai Ambani Group is in talks to buy a stake in SpiceJet, a low-fare airline, according to media reports.
Zandu Pharmaceutical slid Rs 393.70, or 3.8 per cent, to Rs 9,976.40. The Indian health-care products maker said its board will meet on Friday to consider a preferential allotment of shares to the founders.
