Foreign institutional investors (FIIs) continued their selling spree on Friday as concerns related to political uncertainty, coupled with earnings downgrade and a weak global trend, impacted investor sentiment.
The broader Nifty lost 21.50 points on Friday to close at 5,553.25 its lowest close since September 13 last year.
The 30-share Sensex managed to recover some of the days losses, but closed in the red at 18,450.23, shedding 59.47 points. Both indices lost over 2% during the week.
Market players attribute the fall to the sustained selling activity by FIIs that have turned cautious on the Indian market on account of macro-economic fundamental factors.
While concerns related to a high current-account deficit and early elections have been looming large, the recent past has seen a couple of foreign brokerages talk about earnings downgrade.
According to provisional data, FIIs were net sellers for the fourth consecutive session on Friday at $37 million.
In the last four sessions, FIIs have sold Indian shares worth approximately $170 million. In the current calendar year, however, Indian markets have seen robust inflows of over $10 billion by foreign investors.
Early this week, Bank of America Merrill Lynch said that 2013-14 Sensex earnings per share (EPS) is likely to be under R1,300, depicting an earnings growth of 8-9%.
As a result, the current consensus expectations of 17% bottom-up growth faces a risk of downgrades, stated the report. Credit Suisse expects another eight to 10% downside (in earnings estimates).
Meanwhile, Asian indices ended on a mixed note on Friday with the Hang Seng shedding 610 points, or 2.73%, while Nikkei gained 200 points.
On Thursday, the Bank of Japan said it will double its bond purchases and revive economic growth in the worlds third-largest economy. Most of the European indices were also trading in the red on Friday.
Back in India, auto major Maruti Suzuki gained 7.23% on hopes that a weaker yen would improve the margins by reducing the cost of imports of auto parts.
However, most Sensex constituents ended the day in the red with Bharti Airtel, HDFC, ICICI Bank, ITC, M&M and NTPC all losing over 1% each.
Reliance Industries, meanwhile, gained 1.6% on hopes that the January-March earnings would improve led by better margins in refining and petrochemical sectors.