Indian shares closed lower on Friday as global data laid bare the economic damage caused by the coronavirus pandemic and big financial stocks came under pressure after a prominent fund house said it would wind up some funds.
The Nifty ended 1.71% lower at 9,154.40 and the Sensex closed down 1.68% at 31,327.08.
The Nifty index finished the week 1.2% lower and the Sensex closed the week 0.83% down.
Asian stocks fell and US stock index futures indicated a lower open as investors also worried over reports that an experimental drug to treat Covid-19 showed inconclusive results.
US business activity plumbed record lows in April as strict stay-at-home orders crushed production, supply chains and consumer spending, a survey showed.
Financials were among the worst hit in Mumbai trading, with Axis Bank Ltd, ICICI Bank Ltd and IndusInd Bank Ltd sliding 4.5%-5.6%.
The Nifty Bank Index dropped 3.3% and the Nifty PSU Bank index tumbled 3.7%.
Franklin Templeton Mutual Fund, one of India's most prominent mutual fund houses within the fixed-income space, said late on Thursday it would wind up six credit funds with a large exposure to higher-yielding, lower-rated credit securities, citing severe market dislocation and illiquidity caused by the coronavirus.
Shares in HDFC Asset Management Co., India's largest mutual fund manager, slid over 6%, while shares in top private-sector lender HDFC Bank fell nearly 1%.
"The continuous underperformance from the banking pack will remain an overhang on the benchmark ahead also," said Ajit Mishra, vice-president of research at Religare Broking.
"Consistent buying interest mainly in pharma and select FMCG majors is indeed providing some solace to participants but it's not sufficient enough to trigger a sustainable upmove in the benchmark."
India has extended the biggest lockdown in the world to curb the spread of the coronavirus, which has infected over 23,000 and killed 718, according to government data.
The economy is likely to suffer its worst quarter since the mid-1990s due to the lockdown in the three months ending in June, according to a Reuters poll, which predicted a mild and gradual recovery.