The Indian market extended the previous session's sharp loss Friday, tracking a global sell-off amid concerns about the pace of job losses in the United States and debt problems in Europe. Closer home, rising inflationary pressures, a burgeoning fiscal deficit and continued selling by foreign investors also weighed on the market.
Meanwhile, positive newsflow such as an upgrade of India's FY11 GDP growth by Morgan Stanley and full subscription received for NTPC's follow-on public issue on the last day of the issue failed to lift sentiment.
A reassuring message by C Rangarajan, a former head of the Reserve Bank of India and chairman of the prime minister's economic advisory council, on the exit of stimulus measures also went unnoticed. Rangarajan said that India will not roll back economic stimulus in a hurry and it would be done in a gradual manner without disturbing growth.
With U.S stocks suffering their worst losses in nine months overnight, the benchmark Sensex fell as much as 500 points to 15,725 today before finishing at 15,791, down 434 points or 2.68% and the Nifty fell 127 points or 2.61% to 4,719.
The BSE mid-cap index shed 2.60% and the small-cap index tumbled 3.25%. On the BSE, 2368 stocks ended in the red versus 487 gainers. Sector-wise, the realty index (down 4.36%), metal (down 4.26%), public sector (down 3.52%), oil/gas (down 3.41%), banking (down 3.04%) and the IT index (down 2.48%) led the decliners.
Tata Power was the lone gainer in the Sensex-30 pack. The stock ended up 0.80%. Among the major decliners, Hindalco, Tata Steel, ONGC, Jaiprakash Associates, Mahindra & Mahindra, Reliance Industries, ICICI Bank, DLF, BHEL and Infosys bore the brunt of the selling ending down by 3%-6%.
Elsewhere, the markets across Asia lost between 1.4% and 4.3%, with stocks cutting across various sectors suffering heavily on sustained selling pressure on concerns surrounding the pace of economic recovery and European sovereign debt.
In London, the FTSE 100 index, which shed 2.2% to close at its lowest level in three months yesterday, was down 1.52% Friday, France's CAC 40 was declining 2.17% and Germany's DAX was down 1.30%, and trading in the U.S index futures indicated that the Dow index could open lower by 33 points on Wall Street Friday morning.
With government deficits rising in southern Europe, the U.S dollar rose further against the euro in Asian trading, putting pressure on commodity prices.
Analysts are divided about whether this is an opportune time to buy stocks and traders look forward to U.S labor data scheduled to be released later in the day for clues as to when policymakers will begin to tighten policy. As risk aversion spreads, a section of analysts foresee the dollar-carry-trade unwinding by foreign investors.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.