Sensex down 325 points, Nifty sinks 100 points

The Sensex fell 325 points on Friday as selling pressure gathered momentum on the Dalal Street. The 50-share Nifty dropped 100 points, while the rupee extended losses to 56.66 against the dollar.

Reserve Bank of India (RBI) governor D Subbarao on Thursday said inflation was still high and current account gap remained a concern for the Indian economy. Mr Subbarao's comments dented rate cut hopes. Traders hit the sell button on their terminals.

Until recently, the market had been certain the central bank would cut rates by another 0.25 per cent at its June 17 review, but his latest comments have muted those hopes.

In-line GDP data for the March quarter failed to lift sentiments on the Street. India's economy grew 5 per cent in 2012-13, its lowest rate in a decade.

Gross Domestic Product grew at 4.8 per cent in the quarter ending March 31. The manufacturing sector grew an annual 2.6 per cent during the quarter while farm output rose just 1.4 per cent.

Rate sensitive stocks saw strong selling pressure, led by the Bank Nifty, which fell over 1.85 per cent. Index heavyweights - ITC and Reliance - traded with deep cuts weighing on markets.

Market expert Sarvendra Srivastava said 6,050-6,070 remain immediate supports for the Nifty.

European shares traded with deep cuts though Japan's Nikkei bounced 1.7 per cent at the end of its worst week in over a year.

(With inputs from Reuters)