Indian stock markets continued to drop for the third successive day on the last trading day of the week on Friday following weak European and Asian bourses and worries of more interest rate increase as inflationary numbers continued to remain on peak.

The scrips from real estate, consumer durables, automobile and capital goods saw huge selling action.

Amar Ambani, Head of Research (India Private Clients), IIFL stated, "Traders and investors preferred to exit their long positions as the NSE Nifty was unable to stage a pull back above its crucial long term moving average (200-DMA). The latest intermediate downtrend was triggered by the RBI`s move to hike rates by 25 bps amid no material sign of moderation in inflation. This month`s FII outflows haven`t helped matters either. Concerns over political stalemate, tepid FDI and deteriorating external balance have also added to the worries."

Finally, the 30-share index, BSE Sensex shed 288.46 (-1.54%) to end the week at 18,395.97 with 22 components in the red.

In the meantime, the broad based NSE Nifty declined 92.15 (-1.64%) to shut the shop at 5,512.15 with 42 components recording loss.

The major gainers in the 30-share index included ONGC, which surged 1.89%, Reliance Energy gained 1.13%, HUL surged 0.54%, Bharti Airtel zoomed 0.45%, HDFC Bank climbed 0.30%, and ITC remained up by 0.30%.

In contrast, the top losers list comprised DLF, which dropped the most 7.02%, Mahindra & Mahindra declined 4.93%, Hero Honda Motors dipped 4.30%, Hindalco slipped 4.27%, Tata Motors shed 4.07%, and BHEL was down by 3.91%.

The BSE Mid and small caps dropped 2.66% and 3.59% respectively.

Among sectoral indices, the real estate index remained down by 118.94 points; the Consumer Durables index shed 241.05 points; the Auto index slipped 326.41 points and the Capital Goods index fell 413.62 points.