After yesterday’s minor pullback, the stock prices slipped on Friday with the benchmark Sensex

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closing below the 17,000-mark decisively as investors cut their positions ahead of a long weekend due to Independence Day holiday on Monday.

The Sensex ended the week at 16,839.63, down 219.77 points, or 1.3 per cent. With Friday’s fall, the index has lost 1,474.7 points or 8.05 per cent this month.

The broader 50-share S&P CNX Nifty closed at 5,072.95, down 65.35 points, or 1.3 per cent.

Analysts said investors turned risk averse and exited their long-positions to avoid catching off-guard in the volatile global

economic situation. “Anything happen before we open for trading on Tuesday,” said one analyst.

On Friday, France, Italy, Spain and Belgium announced ban on short selling in finance stocks – a knee-jerk response similar to the Lehman-event in 2008 when United States and European regulators banned short selling to stop speculative trading in stock markets.

Key European indices gaining over 1-2 per cent in their early trades while other Asian indices also closed higher.

In India selling in technology and banking stocks pulled down the benchmark indices.

The market breadth was also weak, with 1,569 stocks declining against 1,257 stocks advancing on BSE.

"Fund flows in the Indian markets have not been that bad considering the intensity of the sell off. The government too is trying its best to address the governance deficit. But, inflation continues to be a big headache with food inflation flaring in end-July,” said Amar Ambani, head of research at IIFL.

Kishor Ostwal, head of research at CNI Research said, “The market sentiment continues to remain volatile due to lack of clarity from global markets. FIIs have been continuously selling in the market, which is also putting pressure as they are unwinding their positions in emerging markets, including India”.

Today, overseas investors net sold equities worth Rs 471.09 crore, taking total outflows to Rs 6,896.41 crore in the current month so far.

Among the laggards in technology space, Wipro dropped nearly 3 per cent to Rs 343, TCS fell 2.7 per cent to Rs 951.20 and Infosys eased 2.6 per cent to Rs 2,374.45.

Banking shares, too, witnessed selling pressure with SBI ending 2.5 per cent lower at Rs 2,193.45 and HDFC Bank falling 2.3 per cent at Rs 468.25.

In the Sensex pack, Tata Motors was the biggest loser falling 5.3 per cent to Rs 801.10 as the Apr-Jun quarter earnings failed to meet street estimates.

Index heavyweight Reliance Industries fell 1.6 per cent to Rs 760.80, while Hindalco Industries, Tata Power and DLF also ended sharply lower.

However, gains in Jindal Steel, M&M and Hero Motocorp, which ended 1-2 per cent higher, helped Sensex cap losses.

NEW LISTING L&T ENDS LOWER

L&T Finance Holdings, which made its debut on the bourses, fell victim to weak market sentiment and closed at nearly 3 per cent at Rs 49.95 compared with issue price of Rs 52 a share.

Over 14 crore shares changed hands on BSE & NSE with total turnover of Rs 725 crore recorded on the bourses.

The company's public issue had received overwhelming response from all categories of investors and was subscribed 5.34 times on the last day receiving bids for 114.44 crore shares against 21.45 crore shares on offer.