The Sensex skidded over 215 points as nervous investors took money off the table amid speculation that the RBI may go for a rate hike this week. Rate sensitives led the decline, with the BSE Realty index emerging as the worst performer among sectoral indices by slumping 3.25 per cent. Banking, financials, consumer durables and capital goods tumbled up to 1.83 per cent. The RBI's Monetary Policy Committee began its three-day meeting today amid speculation that it may hike the key interest rate on June 6 for the first time in over four years due to firming inflation.
The Sensex, which opened on a strong footing amid positive global leads and hit a high of 35,555, soon slipped into the negative zone on massive selling in several heavyweights. It finally ended at 35,011.89, down 215.37 points or 0.61 per cent.
The broader NSE Nifty too ended lower by 67 points, or 0.63 per cent, at 10,628, after hovering between 10,770 and 10,618. Meanwhile, foreign portfolio investors (FPIs) offloaded shares worth a net Rs 202.80 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 337.97 crore on Friday, as per provisional data.
"Market erased early gains despite positive momentum in the global market as investors are gradually factoring a rate hike ahead of RBI's monetary policy. As the result season is over, market participants are keen on macros, the movement of oil price and rupee... On the other hand, the tailwinds caused by prognosis of good monsoon and uptick in economic activity in Q4FY18 will boost consumption led story and rural economy," said Vinod Nair, Head of Research, Geojit Financial Services.
HDFC Bank was the top loser in the Sensex pack, falling 2.99 per cent, followed by Adani Ports at 2.87 per cent.
Other laggards included Bharti Airtel 2.77 per cent, Power Grid 2.06 per cent, HUL 1.73 per cent, ONGC 1.71 per cent, NTPC 1.43 per cent, SBI 1.37 per cent, Asian Paints 1.20 per cent, ICICI Bank 1.14 per cent and Kotak Bank 1.13 per cent.
Bucking the trend, Dr Reddy's topped the gainers list by spurting 2.86 per cent, followed by Infosys, M&M, Tata Steel, RIL, TCS and Yes Bank.
Among the BSE sectoral indices, realty fell 3.25 per cent, power 2.32 per cent, telecom 1.95 per cent, consumer durables,1.83 per cent, utilities 1.66 per cent, finance 1.50 per cent, bankex 1.42 per cent, infrastructure 1.35 per cent, capital goods 1.26, PSU 1.17 per cent, FMCG 1.14 per cent, healthcare 0.46 per cent and auto 0.37 per cent.
IT, teck and metal indices ended higher, rising up to 0.42 per cent.
The broader markets too were under pressure, with the BSE small-cap index losing 2.09 per cent, while the mid-cap index finished 0.82 per cent down.
Globally, other Asian markets ended in a better shape. Japan's Nikkei rose 1.37 per cent higher, Hong Kong's Hang Seng climbed 1.66 per cent and Shanghai Composite Index finished 0.52 per cent higher.
European markets too saw a firm trend. Paris CAC rose 0.36 per cent and Frankfurt's DAX gained 0.24 per cent. London's FTSE too rose 0.73 per cent in late morning deals.