The Indian equity benchmarks edged lower on Friday as investors booked profits after a three-day rally which saw Sensex and Nifty surge over 3.5 per cent amid weak global cues. The Sensex fell as much as 261 point and Nifty 50 index fell below its important psychological level of 17,500. Asian shares slipped and the dollar held firm on Friday as traders edged away from riskier assets amid renewed concerns about COVID-19 and ahead of key U.S. inflation data that could set direction on Federal Reserve rates.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.4 per cent and Japan's Nikkei shed 0.5 per cent.
Overnight the S&P 500 lost 0.72 per cent and the Nasdaq Composite dropped 1.71 per cent. S&P 500 futures rose 0.14 per cent in Asian hours.
Shares and risk-friendly currencies had performed well earlier in the week, with MSCI's regional benchmark posting its best day in two months on Tuesday, helped by indications the Omicron strain of the new coronavirus might not be as economically disruptive as first feared.
As of 9:40 am, the Sensex was down 156 points at 58,651 and Nifty 50 index fell 42 points to 17,474.
Nine of 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty IT index's 0.65 per cent decline. Nifty Financial Services, Bank, Private Bank, PSU Bank, and Consumer Durable indices also fell around 0.5 per cent.
On the other hand, Pharma, Healthcare and Metal shares were witnessing buying interest.
Mid- and small-cap shares were trading mixed as Nifty Midcap 100 index was trading flat while Nifty Smallcap 100 index gained 0.5 per cent.
Titan was top Nifty loser, the stock fell 2.12 per cent to Rs 2,322. Tech Mahindra, Divi's Labs, Bajaj Finserv, HDFC, Bajaj Finance, Tata Consumer Products, HCL Technologies, Reliance Industries, Kotak Mahindra Bank and Infosys also fell between 0.8-1.5 per cent.
On the flipside, Asian Paints, Adani Ports, Sun Pharma, Grasim Industries, Mahindra & Mahindra, Indian Oil, Bharat Petroleum, Maruti Suzuki and Hindalco were among the losers.
The overall market breadth was positive as 1,847 shares were advancing while 1,023 were declining on the BSE.