The BSE Sensex fell for the third straight session on Friday, down 116 points at 18,269, on low factory output and weak overseas markets amid upsurge in global crude oil prices.
Heavyweights such as RIL, ITC, L&T, ICICI Bank, SBI, HDFC and Tata Steel pulled down the Sensex.
The Bombay Stock Exchange 30-share indicator initially touched a high of 18,399.02 but fell to a two-week low of 18,182.90 before recovering some ground.
It settled at 18,268.54, down 116.36 points or 0.63 %. It had lost over 110 points in last two sessions.
The NSE 50-issue Nifty also declined 35.25 points or 0.64 % to end at 5,485.80.
The fall was triggered by reports that the industrial growth rate shrunk by more than half to 6.3 % in April, on poor show by the manufacturing and mining sectors, a development that the government described as "disturbing".
The Index of Industrial Production (IIP), based on the new series (with 2004-05 base year), declined to 6.3 % in April from 13.1 % in the same period last fiscal.
As per the old data (with base year 1993-94), the decline was much steeper, with the IIP nosediving to 4.4 % in April, from 16.6 % in the year ago period.
Finance Minister Pranab Mukherjee said, "The IIP growth figures are disturbing."
Meanwhile, Brent crude prices surged close to $ 120 a barrel for July contracts, triggering inflation and interest rate concerns. Asian and European stocks showed a mixed trend, with downward bias, on weakness in the global economic recovery and below-expected trade data from China.
Discouraging IIP data followed rise in food inflation report yesterday, worrying already cautious investors concerned over high interest rate regime. RBI's next monetary policy meeting is slated for mid-June.
In Asia, key indices from Hong Kong, Singapore, South Korea and Taiwan closed with losses, while stocks in China and Japan finished with moderate gains.
European markets too displayed a mixed trend: CAC was down 0.42 %, while DAX was up 0.17 per cent and the FTSE by 0.07 %.
Overall, 25 out of 30 Sensex-based stocks finished with losses while others closed with gains. DLF dropped 1.83 %, ITC (1.69 %), L&T (1.64 %), REL Infra (1.52 %), Tata Steel (1.36 %), Hero Honda (1.23 %), ICICI (1.06 p%), RIL (1.06 %), NTPC (1.04 %), Cipla (1.00 %), SBI (0.89 %) and Bharti Airtel (0.69 %).
From the 13 sectoral indices, BSE-Consumer Durables settled in the green, while others closed with losses. Capital Goods dipped 1.08 %, FMCG by 1.04 %, Realty by 0.80 % and Metal by 0.73 %.
The total market breadth at BSE remained negative as 1,650 stocks ended in the red while 1,197 settled in the green. The total turnover was relatively high at Rs 2,638.60 crore from Rs 2,359.01 crore on Friday.