The major contributor to the fall was Metal index, which dropped by 161.05pts at 9275.10 and capital goods index by 136.83pts at 10,076.44.
MUMBAI: A sharp surge in inflation to highest level in more than two years weighed down heavily on the stock market on Friday with the benchmark Sensex closing down 113 points after hitting yet another peak earlier in the day.
The Bombay Stock Exchange's 30-share barometer index settled at 14,538.90, a fall of 113.19 points, after hitting an all-time high of 14,723.88 earlier in the intraday trade.
After opening on a firm note at 14,684.35, the index hit an intraday low of 14,493.67, as the mood turned somewhat hesitant with a sharp rise in inflation and profit booking emerging on bourses after the recent record breaking rally.
Brokers also attributed the weak trend to the cautious sentiments being adopted by traders ahead of the forthcoming Union Budget to be announced on February 28.
Despite the recent measures taken by the government, the government data today showed that the inflation rose to 6.58 per cent for the week ended January 27, while raising apprehensions in the market that the central bank may soon take some necessary monetary measures.
Market breadth was also skewed in favour of losers, while all the sectoral indices landed in negative terrain at close.
The National Stock Exchange's Nifty also dropped by 36.00 points or 0.85 per cent to close at 4,187.40, from previous close of 4,223.40.
Metal and capital goods segments led the fall while small-cap and mid-cap shares also bore the brunt of selling.
Domestic mutual funds were among the prominent sellers in order to fund their financial year-end dividends.
Reflecting the downslide in metal and capital goods stocks, the sectorial BSE-Metal index dipped by 161.05 points or 1.74 per cent to 9,114.05 and the BSE-CG index by 136.85 points or 1.36 per cent to 9,939.61.
The market breadth was sharply negative as 2,037 shares showed losses, while 640 closed with gains.
The trading volume was low at Rs 4,542.52 crore from Rs 5,136.94 yesterday. Pochiraju Industries Ltd -- listed today -- clocked the highest turnover of Rs 182.21 crore followed by Global Broad (Rs 156.95 crore), Auto Ind (Rs 154.50 crore), RIL (Rs 110.54 crore) and India bulls (Rs 102.60 crore).
The broad-based BSE-100 index dropped by 73.86 points to 7,337.41 from the previous close of 7,411.27.
The BSE-200 index and the Dollex-200 were quoted lower at 1,733.55 and 654.53 at close compared to previous close of 1,752.83 and 661.66 respectively. The BSE-500 Index ended down at 5,526.80 from last close of 5,592.49 and the Dollex-30 ended lower at 2,706.98 from 2,727.43.
RIL dropped by 7.10 to 1388.25, Bharti Airtel by 14.00 to 752.80, Tata Steel by 8.35 to 453.25, Hindalco by 1.75 to 173.25, L&T by 36.60 to 1715.95, BHEL by 3.60 to 2504.45, ACC 31.80 to 1035.05, Maruti by 21.80 to 941.35, Grasim by 33.30 to 2827.05, TCS by 12.25 to 1287.80, REL by 10.35 to 555.50, SBI by 6.95 to 1197.65, Dr Reddy by 11.05 to 730.75, Icici Bank by 5.80 to 992.10, HLL by 2.55 to 202.60 and Satyam Compu by 17.20 to 468.50.
However, HDFC firmed up by 8.60 to 1816.30, Tata Motors by 10.10 to 905.65, Bajaj Auto by 38.85 to 3047.10, HDFC Bank by 9.30 to 1109.85 and Wipro by 7.25 to 642.20.
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