Markets ended nearly 1% lower on Friday weighed down by selling pressure in banking major SBI on concerns of rising non-performing assets and profit taking in index heavyweights.
The Sensex ended down 162 points or 0.9% at 18,684 and the 50-share Nifty ended down 52 points or 0.9% at 5,686.
European shares too fell on Friday, led lower by growth-linked stocks hit by mounting concerns about a U.S fiscal crisis that could threaten growth in the world's biggest economy.
Adding to poor sentiment were worries about Greece as it inched towards securing its next tranche of urgently needed international aid. The country will vote to approve its 2013 budget on Sunday, after Wednesday's tight vote in favour of a 13.5 billion euro austerity package.
In Asia, Japan's Nikkei fell a four-week closing low on Friday, led by exporter shares, as a looming U.S. fiscal crisis threatened to tip the world's largest economy into recession and as uncertainty over a Greek bailout rekindled worries about the euro zone. The Nikkei ended 0.9% lower at 8,757.60, falling for the fifth straight session, and was down 3.2% this week, its worst weekly performance in four weeks.
Hong Kong shares eased further from their 2012 highs as weak overseas markets spurred more profit-taking, particularly in China-focused shares, dragging the benchmark to its worst weekly performance since mid-July. The Hang Seng Index fell 0.9% to 21,384.4, its worst week in four months, while the Shanghai Composite edged down slightly by 0.1%
In the broader markets, the midcap index dropped nearly 1% while the smallcap index capped its downfall around 0.7%.
Among the sectoral indices, PSU, Realty, Metal, Oil & Gas, Bankex, Power, Consumer Durables, Capital Goods and IT indices losing 1-2%.
Bajaj Auto, Maruti Suzuki and Cipla up 0.1-0.4% were the only gainers among the Sensex-30.
Among the losers were SBI, Tata Steel and ONGC down 3-4% after report8ing disappointing quarterly numbers.
ONGC slipped after reporting a sharpest year-on-year fall in net profit since December 2008 quarter. The net profit of the state-owned oil exploration company has declined by 32% in September quarter to Rs 5,897 crore against Rs 8,642 crore in previous year quarter due to higher subsidy outgo.
SBI lost ground after announcing the quarterly numbers. India's largest PSU bank has reported at net profit of Rs 5,628 crore for the quarter ended September 30, 2012.
Tata Steel dropped after reporting a consolidated net loss of Rs 363.93 crore for the second quarter ended September 30, 2012 as against a net profit of Rs 212.43 crore for the same period last year.
The other notable losers were Sterlite, BHEL, NTPC, ICICI Bank, Tata Motors, Hero MotoCorp, Wipro, Infosys and Reliance Industries down 1-2%.
The market breadth was negative. 1733 stocks declined while 1122 stocks advanced on the BSE.
