Falling for sixth straight day, the BSE benchmark Sensex Friday closed 57 points down at a new four-month low of 18,735.60 on worries that economic reform momentum may slacken and global sentiment remained weak as a solution for the Cyprus issue continued to prove elusive.
Alternate bouts of buying and selling ahead of the expiry of derivatives contract next week was also a reason behind the lacklustre domestic market, a broker said.
The BSE 30-share barometer initially displayed signs of recovery but succumbed to selling pressure on sluggish Asian trends. It touched a low of 18,669.20 in late afternoon deals. Trading turned choppy in last two hours of trade, before closing at 18,735.60, down 57.27 points or 0.30%.
In six trading days, Sensex has tanked by 834.84 points or 4.27%. In the week, it has plunged by 691.96 points or 3.56%, its worst weekly loss in almost 15 months.
Today, 18 Sensex stocks declined led by SBI, ICICI Bank, Infosys, RIL, Bharti Airtel, Dr Reddy's and Tata Steel.
"Markets succumbed to selling pressure amidst uncertainty on the political front and renewed concerns in the euro zone," said Amar Ambani, Head of Research, IIFL.
Shares from consumer durable, realty, IT, teck, pharma, refinery and banking sectors closed with marked to moderate losses while some metal and auto stocks attracted buying.
Similarly, the NSE 50-issue CNX Nifty traded in a range of 5,691.45 and 5,631.80 before settling at 5,651.35, showing a fall of 7.40 points or 0.13%.
Trading is expected to remain insipid on account of market holidays next week on March 27 and March 29 on account of "Holi" and "Good Friday" respectively.
A weakening Asian trend and lower opening in Europe as Cypriot lawmakers begin a debate to search for a bailout to prevent a financial collapse, influenced the Indian market.
"On Eurozone front, situation could turn volatile if Cyprus is unable to raise the 5.8 billion euros necessary for a 10 billion euro bailout package by Monday," said Sanjeev Zarbade, vice president - PCG Research, Kotak Securities.
Meanwhile, the government's 5.82% share sale in SAIL was fully subscribed helping the exchequer rake in about Rs. 1,515 crore.