Mumbai: Weak global cues, along with higher inflation and a no-trust vote in Parliament, subdued the key Indian indices in the week-ended Friday.
Weakening of the Indian rupee to fresh lows during the week also eroded investor sentiments in the Indian equity market, analysts said.
However, the Indian currency recovered and appreciated on Friday, thereby lifting the indices on a daily basis and restricting further decline in the equity market compared to the previous week's close.
Significantly, on Wednesday the benchmark BSE Sensex hit a fresh record high of 36,747.87 points, but could not hold on to the gains.
On a weekly basis, Sensex closed at 36,496.37 points -- down 45.26 points or 0.12 per cent from the previous close.
The wider Nifty50 on the National Stock Exchange (NSE) settled at 11,010.20 points, down just 8.7 points or 0.08 per cent -- from its previous week's close.
The market breadth was negative in four out of the five trading sessions of the week, according to Deepak Jasani, Head of Retail Research at HDFC Securities.
"Weak global cues and the no-confidence motion in the monsoon session of Parliament dented the sentiment across the street," said Parteek Jain, Director of Hem Securities.
Moreover, ahead of the F&O expiry in the coming week, traders were seen squaring off their positions, Jain added.
Rahul Sharma, Senior Research Analyst at Equity99 noted: "Stock-specific action continued as sentiment was partially hit after index heavy-weight like Bajaj Auto and Kotak Mahindra Bank missed market expectations."
The no-confidence motion vote had a limited impact on market sentiments as the ruling party was sure of its majority in Parliament, he said.
Earlier in the week, the rise in the wholesale inflation rate for June depressed the equity indices.
The wholesale inflation rate for June was recorded at 5.77 per cent, compared to 4.43 per cent in the previous month, according to data released on Monday.
On the currency front, the rupee closed at 68.85 on Friday, strengthening by just 3 paise from its previous week's close of 68.88 per greenback.
On Thursday, the rupee touched a fresh closing low of 69.05 per dollar. Minutes into the trade on Friday, it hit an all-time low of 69.12 against the greenback but eventually bounced back sharply and helped end the currency trade with appreciation on a weekly basis.
According to Jasani: "Strengthening US dollar, weakening Chinese yuan, domestic political uncertainty, buoyant crude prices and capital outflows have all resulted in pressurizing the rupee lately."
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrip worth Rs 1,209.41 crore, while the domestic institutional investors purchased stocks worth Rs 1,300.06 crore in the week bygone.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested Rs 888.70 crore, or $129.80 million from the equities segment on stock exchanges during the week ended on July 20.
Sector-wise the major gainers in the week were energy, public sector banks and IT, while metals, realty, pharma and auto were among the major losers, HDFC Securities' Jasani told IANS.
The top weekly Sensex gainers were Infosys (up 3 per cent at Rs 1,348.35); Reliance Industries (up 2.90 per cent at Rs 1,128.55); Yes Bank (up 2.72 per cent at Rs 386.65); ONGC (up 2.10 per cent at Rs 157.85); and Asian Paints (up 2.08 per cent at Rs 1,396.90 per share).
The major losers were Tata Steel (down 9.80 per cent at Rs 503.45); Bajaj Auto (down 9.35 per cent at Rs 2,841.10); Tata Motors (DVR) (down 6.32 per cent at Rs 140.80); Kotak Mahindra Bank (down 5.08 per cent at Rs 1,333.45); and Hindustan Unilever (down 4.88 per cent at Rs 1,656.20 per share).