The 30-share BSE benchmark index dropped another 267 points during this truncated trading week, but managed to end well above the 20,000 mark. (Agencies)
Brokers said the market was also under pressure as the rupee fell to a two-month low of 63.91 against the dollar. A depreciating Indian unit could slow capital inflows into Asia's third largest economy and deter the Reserve Bank from easing liquidity curbs further.
A falling rupee will fuel inflation, increase import bill and expand current account deficit. Inflation, as measured by the consumer price index, rose to 10.09 percent in October from 9.84 percent in the previous month, entering double digits after seven months, according to the government data.
The markets tumbled even after the data showed exports in October rose at the fastest pace in two years. India's exports in October rose 13.47 percent to USD 27.27 billion from a year ago, while imports dipped 14.5 percent, helping to narrow down the trade deficit.
Industrial production grew 2 percent in September, mainly on account of better performance in the power and mining sectors.
The Sensex opened lower at 20,596.40 and fell further to 20,161.64 on selling pressure. But, it recovered afterwards to 20,672.53 before ending at 20,399.42, showing a loss of 266.73 points, or 1.29 percent, over the last weekend close.
The BSE barometer surged over 200 points on Thursday (the last trading day as stock market was closed on Friday on account of Muharram).
The Sensex, which saw a pre-Diwali rally, has dropped by 797.39 points, or 3.76 percent, in the last two weeks.
The 30-share BSE benchmark index dropped another 267 points during this truncated trading week, but managed to end well above the 20,000 mark.