PTI Mumbai

Equity benchmark indices Sensex and Nifty buckled under selling pressure to settle nearly 1 per cent lower on Friday as investors pared exposure to bank and IT stocks ahead of the earnings season starting next week.

A depreciating rupee against strengthening US dollar overseas further weighed on sentiment, traders said.

Despite a positive start, the 30-share BSE Sensex tumbled 720.60 points or 0.90 per cent to close at 79,223.11. During the day, it slumped 833.98 points or 1.04 per cent to 79,109.73.

The NSE Nifty tanked 183.90 points or 0.76 per cent to 24,004.75. On a weekly basis, the BSE benchmark jumped 524.04 points or 0.66 per cent, and the Nifty climbed 191.35 points or 0.80 per cent.

"A sell-on-rally sentiment prevails in the market due to a strong US dollar, high valuation, and a shift towards a multi-asset investment strategy. Reducing US jobless claims and potential policy shifts in the US indicate that the Fed is not in a hurry to cut interest rates in the near term.

"Looking ahead, the market is likely to focus on Q3 earnings, with expectations of improvement in earnings on a QoQ basis," Vinod Nair, Head of Research, Geojit Financial Services, said.

From the Sensex pack, Zomato, HDFC Bank, Tech Mahindra, Adani Ports, Tata Consultancy Services, ICICI Bank, Sun Pharma, Larsen & Toubro, HCL Tech and ITC were the major laggards.

On the other hand, Tata Motors, Nestle, Titan, Hindustan Unilever and Reliance Industries were among the gainers.

"Despite the short recovery in past two sessions, markets lost momentum as there is still a lot of pessimism due to slowing growth, higher domestic valuations, foreign fund outflows, and uncertainty over US trade policies post Trump's resumption as country's president.

Hence, markets may see bouts of correction, and investors will continue to maintain caution while keeping an eye on global developments," Prashanth Tapse, Senior VP, Mehta Equities Ltd, said.