The Sensex and the Nifty fell on Friday for a third consecutive session to a near 1-1/2 month closing low as blue chips such as ICICI Bank declined on worries that stocks have gone ahead of underlying anaemic earnings growth.
The Sensex plunged 208.59 points or 0.73 per cent at 28,261.08 and the Nifty fell 63.75 points or 0.74 per cent at 8,570.90.
The 30-shares index is down 0.52 per cent for the week, while the NSE index has so far marked a weekly decline of 0.64 per cent.
Barring IT and TECk, all other BSE sectoral indices ended significantly in the red. Among them, realty index fell the most by 3.74 per cent, followed by power 2.09 per cent, FMCG 2.09 per cent and consumer durables 1.93 per cent. On the other hand, IT index was up 0.86 per cent and TECk 0.49 per cent.
Top five Sensex gainers were Wipro 2.92%, Infosys 1.3%, Coal India 0.75%, TCS 0.59% and HDFC Bank 0.34%, while the major losers were NTPC 6.25%, BHEL 3.68%, ICICI Bank 3.36%, GAIL 3.31% and M&M 2.7%.
October-December was the third straight quarter when earnings lagged expectations since Narendra Modi's anointment as Prime Minister in May last year, prompting investors to pare some positions.
Twelve-month forward earning estimates for large- and mid-cap companies have fallen by 5.1 per cent over the last three months, Thomson Reuters StarMine data showed.
Falls also tracked lower Asian stocks as Federal Reserve-inspired gains petered out, while the dollar steadied after rebounding from the shock of a surprisingly dovish US central bank.
"Earnings are expected to remain weak for the fourth quarter as well," said Deven Choksey, managing director, K R Choksey Securities.
US dollar strength is also driving some funds to pare their positions, he added.
Meanwhile, Foreign Portfolio Investors bought shares worth Rs 1,428.72 crore yesterday, as per provisional data released by the stock exchanges.
European shares inched higher in early deals on Friday, helped by gains in the construction sector after Holcim and Lafarge agreed to new merger terms.
Asian stocks stalled on Friday as Federal Reserve-inspired gains petered out, while the dollar steadied after rebounding from the shock of a surprisingly dovish US central bank.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed after rallying 1.3 per cent the previous day. But it still looked set for a gain of around 2.4 per cent for the week.
In a mixed day for the region, shares in Hong Kong, Malaysia and South Korea slipped while their Australian and Chinese counterparts rose.
US shares fell overnight as the dollar's rebound dragged down oil and other commodity prices, sending energy and material sectors lower.
Japan's Nikkei was flat, taking a breather after a strong rally since February that took it to a 15-year high.