Benchmark indices closed on Friday in the red and tumbled nearly 1% in the last leg of the trade dragging the Nifty below the 5,600 mark. Worsening global risk environment and nervousness about the the winter session of the parliament next week weighed heavily on the sentiments. At the close the Sensex was down 162 points at 18,309 and the Nifty gave off 57 points at 5,574.
Earlier in the day, the markets remained volatile for the major part but with the European markets starting to trade in the red and the selling pressure in rate sensitives intensifying in the noon deals, the markets gave off all the gains.
In the broader markets, the midcap index closed in line with the Sensex down 0.8% while the smallcap index underperformed with over 1% loss.
Most of the Asian markets ended on a flat note in trades today amid concerns about the looming US "fiscal cliff", while Japanese stocks rallied for a second day on expectations of further monetary policy easing after an election next month.
The Shanghai Composite slipped 15 points to end at 2,014, Hang Seng advanced 50 points to 21,159, Seoul Composite slosed weaker by 10 points at 1,860 and Taiwan Weighted shed 14 points to 7,130. While, Japan's Nikkei jumped 2.2% or 194 points to end at 9,024.
In Europe, CAC, DAX and FTSE was down 0.3-0.7% as police and protesters clashed in Spain and Italy on Wednesday as millions of workers went on strike across Europe to protest against spending cuts they say have made the economic crisis worse.
Back home, among the sectotal indices, IT index was the only one to close in the green with a 0.5% gain. Among the draggers were Realty, Bankex, Auto, Capital Goods, FMCG and Power indices which dropped between 1-3%.
The IT index gained as rupee dropped against the dollar today on uncertainty over the US fiscal cliff. Infosys up 2% was the top gainer in this space.
Subbarao's comments that India's inflation rate is still high suggesting that the bank is unlikely to loosen monetary conditions anytime soon weighed down the rate sensitives.
Among the banks ICICI Bank, PNB, SBI dropped 2% each along with HDFC Bank and Axis Bank down 0.5% each.
In the auto segment, Tata Motors, Maruti Suzuki, Bajaj Auto, Mahindra & Mahindra and Hero MotoCorp dropped 1-3%.
DLF, Unitech and DB Realty down 3-6% were the major draggers in the realty space.
Among the other notable losers were Cipla, Hindustan Unilever, Hindalco, BHEL, Gail India, L&T, Tata Steel and Sterlite down 1.5-2%
The only gainers for the day were Bharti Airtel, Dr Reddys Lab, Coal India, ONGC and Jindal Steel up 0.6-3%.
The market breadth was negative. 1738 stock declined while 1112 stocks advanced on the BSE.