Mumbai: Benchmark Sensex buckled under selling pressure for the third straight session Friday, capping off its worst month in over two-and-half years, as investors clamoured for the exit amid valuation and macro stability concerns.
The 30-share BSE index slipped 97.03 points in see-saw trade to close at 36,227.14, while the NSE Nifty dropped 47.10 points to 10,930.45.
The Sensex has lost a whopping 2,417.93 points, or 6.26 percent, in September -- its worst monthly show since February 2016.
Sentiment remained weak on the back of a weak rupee, high crude oil prices and liquidity concerns, while investors were also reluctant to make fresh bets ahead of RBI policy meeting next week, brokers said.
Selling took hold at the start of October futures and options (F&O) series in the derivatives segment.
Both the key indices recorded their fourth straight weekly fall. The Sensex lost 614.46 points, or 1.67 percent and the Nifty dropped 212.65 points, or 1.91 percent, this week.
Meanwhile, domestic institutional investors (DIIs) sold shares worth a net Rs 186.69 crore, while foreign portfolio investors (FPIs) bought shares worth Rs 552.44 crore Thursday, according to provisional data.
"Factors like heightened volatility of the money market, INR depreciation, increased bond yield and selling by FIIs in the emerging market triggered cautiousness in the market.
"Mid and small-cap continued to underperform while short covering in banking stocks helped Bank Nifty to close on a positive note.
"Investors are yet to gain confidence to start bottom fishing due to lack of liquidity, margin funding and short selling in the market," said Vinod Nair, Head of Research, Geojit Financial Services.
Selloff in the NBFC space continued unabated, with PNB Housing Finance losing 4.46 percent, Indiabulls Housing Finance 8.91 percent and Dewan Housing Finance 5.08 percent.
Auto stocks too faced selling pressure ahead of release of monthly sales data.
Continuing its slide, Yes Bank lost the most among the Sensex constituents, crashing 9.72 percent. The private sector lender's shares have been under pressure after the RBI last week curtailed the term of its MD and CEO Rana Kapoor.
Other laggards were Hero MotoCorp, Bharti Airtel, Tata Steel, Vedanta, Bajaj Auto, Coal India, PowerGrid, L&T, Maruti Suzuki, Adani Ports, M&M, Sun Pharma, Tata Motors, HUL, ICICI Bank, TCS and Kotak Bank, falling by up to 5.16 percent.
In contrast, Axis Bank, HDFC Ltd, HDFC Bank, ITC, Wipro, ONGC, Asian Paints, Infosys, RIL and IndusInd Bank rose up to 2.28 percent.
Most metal and mining stocks came under heavy selling pressure.
The BSE Metal index tanked 5.01 percent, with all its constituents ending in the red, led by Jindal Steel, SAIL, Nalco, Hindalco, JSW Steel and Tata Steel.
Among other sectoral indices, realty dropped 4.85 percent, telecom 4.01 percent, capital goods 2.67 percent, infrastructure 2.41 percent, power 2.37 percent, auto 2.32 percent, consumer durables 2.23 percent, healthcare 1.38 percent, PSU 1.36 percent, teck 0.85 percent and IT 0.53 percent.
Oil & gas and banking indices managed to end in the positive zone.
Broader markets too fell in tandem with the benchmarks, with the BSE small-cap index plunging 3.41 percent and mid-cap gauge losing 1.61 percent.
Most of other Asian markets ended higher, tracking overnight gains at the Wall Street.
Shanghai Composite Index rose 1.06 percent, Hong Kong's Hang Seng inched up 0.10 percent and Japan's Nikkei gained 1.36 percent.
European stocks witnessed a subdued trend. Frankfurt's DAX fell 0.67 percent and Paris CAC was down 0.31 percent in their late morning deals. London's FTSE too shed 0.16 percent.