Equity benchmark index Sensex buckled under selling pressure for the second straight session to close below the 65k mark on Friday, as investors offloaded IT, teck and metal energy stocks amid a bearish global trend.
Besides, fresh foreign fund outflows also hit investor sentiments, traders said.
In a volatile trade, the 30-share BSE Sensex declined 202.36 points or 0.31 per cent to settle at 64,948.66. During the day, it fell by 396.3 points or 0.60 per cent to 64,754.72.
The NSE Nifty dipped 55.10 points or 0.28 per cent to end at 19,310.15.
"Concerns regarding inflation and shifts in investor preferences towards safer assets dampened overall market sentiment for domestic equities. Fears of a Fed rate hike, coupled with a decline in global equities, exerted additional downward pressure, specifically on IT stocks.
"Higher US bond yields and default risk in China are poised to prompt FIIs to adopt a more prudent stance when considering investments in emerging markets," said Vinod Nair, Head of Research at Geojit Financial Services.
Tata Consultancy Services was the biggest laggard in the Sensex list, falling 2.14 per cent, followed by Tech Mahindra, Mahindra & Mahindra, Infosys, Power Grid, Wipro, Bajaj Finserv and Bajaj Finance.
In contrast, Reliance Industries, Maruti, Nestle, Axis Bank, Hindustan Unilever and Tata Motors were among the gainers.
In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong ended in the negative territory.
European markets were trading down. The US markets ended lower on Thursday.
Global oil benchmark Brent crude declined 0.46 per cent to USD 83.73 a barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,510.86 crore on Thursday after a day's breather, according to exchange data.
The BSE benchmark had declined 388.40 points or 0.59 per cent to settle at 65,151.02 on Thursday. The Nifty slipped 99.75 points or 0.51 per cent to end at 19,365.25.