The Nifty 50 index fell for the first time in nine sessions on Friday, succumbing to the persistent concerns of U.S. rate hikes that have weighed on global equities.
The Nifty 50 settled 0.85% lower at 19,331.80, while the 30-member S&P BSE Sensex fell 0.77% to 65,280.45.
Both indexes hit record highs for the sixth time in seven sessions before reversing course. Still, the recent rally, helped the Nifty and Sensex end the week with gains of 0.74% and 0.87%, respectively.
The resilience of the U.S. labour market, as measured by private payrolls, further fanned fears that the Federal Reserve would prolong its high-interest regime and triggered a fall in equity markets across the world. [MKTS/GLOB]
Indian equities had been resisting the pressure for the past few sessions but the rally, said brokerage CSLA, may over-extend domestic valuations.
The brokerage said a pullback from the record-high levels was likely since investor sentiment - measured by the bull-bear index - has swung from an extremely bearish reading of 8.2% in March to an extremely bullish reading at 95.9% in early July.
The weakness in Indian equities was broad with 10 of the 13 major sectoral indexes finishing lower, and the smallcap and midcap indexes declining 0.44% and 0.81%, respectively.
The high-weightage financials fell 0.90%.
Mahindra & Mahindra Financial Services lost 3.56% after BofA Securities downgraded the stock to "neutral" from "buy", citing high valuations and elevated operating costs.
Fast moving consumer goods slid over 1.5% after liquor makers declined following reports that the state of Karnataka proposed to hike excise duty on Indian-made liquor and beer.
Among the bright spots, Tata Motors jumped to a record high after its Jaguar Land Rover unit gave upbeat first-quarter sales and free cash flow forecasts, while drone maker ideaForge soared nearly 93% in its market debut.
