The Sensex and Nifty ended marginally lower as investors booked profits after a rally that lifted the benchmark indexes to near two-year highs in the previous session.

The fall in Indian stocks was in line with their Asian peers as expectations of a US interest rate hike weighed on the domestic sentiment.

The 30-share BSE index Sensex closed lower by 7.34 points or 0.03 per cent at 28,832.45 and the 50-share NSE index Nifty ended down 2.2 points or 0.02 per cent at 8,897.55.

Both indexes touched their highest since March 2015 in the previous session.

Both indexes snapped a five-week gaining streak, with NSE down 0.5 per cent for the week and BSE losing 0.2 per cent.

Among BSE sectoral indices, FMCG index fell the most by 0.39 per cent, banking 0.26 per cent, auto 0.23 per cent and capital goods 0.07 per cent. On the other hand, oil & gas index was up 1.12 per cent, realty 0.86 per cent, TECk 0.74 per cent and metal 0.69 per cent.

Top five Sensex gainers were GAIL (+3.47%), Reliance (+2.04%), Sun Pharma (+1.44%), Hero MotoCorp (+1.33%) and Axis Bank (+1.28%), while the major losers were HDFC (-1.89%), Asian Paints (-1.34%), ITC (-0.98%), ICICI Bank (-0.86%) and SBI (-0.69%).

“The decline in the indexes is not surprising. It was expected that some profit-booking would take place and that is what we're seeing now,” said Gaurang Shah, vice president, Geojit Financial Services.

“Some caution can also be expected ahead of the state election results,” he said. Results of five state elections, including the key state of Uttar Pradesh, are expected at the end of next week.

Financials were down, with the Nifty Financial Services index falling as much as 1 per cent. Bajaj Finserv and Housing Development Finance Corp fell more than 2 per cent.

The Nifty Auto index declined after rising in the last two sessions. Bajaj Auto was down 0.6 per cent after gaining as much as 2.3 per cent in the previous two sessions.

Apollo Hospitals Enterprise Ltd fell as much as 5.3 per cent after a unit of Malaysian sovereign fund Khazanah launched a block deal to sell $160-million worth of shares in the company.

Among the gainers, Hindalco Industries Ltd rose after the company said it would raise $500 million in a share offering to repay its debt.

Reliance Industries rose as much as 4.1 per cent to its highest since May 2008 underpinned by hopes over its telecom unit, Jio, with CLSA citing optimistic assessment provided by the company at an analyst meeting.

Asian markets

The dollar held broad gains on Friday as the risk of an imminent US interest rate hike slugged sovereign bonds and commodities, even managing to sour Wall Street's party as the reality of rising borrowing costs began to sink in.

Asian stock markets were mostly lower, with MSCI's broadest index of Asia-Pacific shares outside Japan off 0.9 per cent in the biggest daily drop so far this year.

US stocks retreated on Thursday, led by financial stocks, while Caterpillar shares dropped following news that federal officials searched its Illinois facilities.

Caterpillar , down 4.3 per cent at $94.36, was the biggest drag on the Dow and among the biggest negatives for the S&P 500. In a statement issued after the closing bell, Caterpillar said the search may be related to an Internal Revenue Service investigation on profits earned by a Swiss subsidiary.

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