The Sensex and Nifty ended lower on Friday, after fluctuating earlier in the session, as the overall sentiment remained dented after US Federal Reserve Chair Janet Yellen signalled an interest rate hike was imminent, while investors back home were worried about the government's move to remove high-value notes.

The broader NSE index closed down 5.85 points or 0.07 per cent at 8,074.10, while the benchmark BSE index ended down 77.38 points or 0.3 per cent at 26,150.24. Both the indexes posted their fourth straight weekly losses.

“There is a major liquidity issue in the domestic market due to the banknotes action and the volatility in the rupee because of rising US bond yields will likely continue for some time," said Vinod Nair, head of research at Geojit BNP Paribas Financial Securities.

“The 8,000 level for Nifty is very important, but the risk of it falling below that mark will be there as the market will continue to remain cautious for a while amid domestic and global uncertainties.”

Among BSE sectoral indices, oil & gas index gained the most by 1.45 per cent, healthcare 1.29 per cent, realty 1.26 per cent and power 1.22 per cent, while consumer durables index was down 1.26 per cent, metal 1.19 per cent, FMCG 0.96 per cent and banking 0.6 per cent.

Top five Sensex gainers were NTPC (+4.58%), Sun Pharma (+2.62%), Bharti Airtel (+2.33%), Hero MotoCorp (+2.15%) and M&M (+1.59%), while the major losers were Tata Steel (-2.00%), ITC (-1.92%), GAIL (-1.76%), HDFC Bank (-1.47%) and Adani Ports (-1.25%).

Asian share markets weakened on Friday as rising US bond yields carried the dollar to a more than 13-1/2 year high against a basket of major currencies, fuelled by expectations that President-elect Donald Trump’s policies will lead to higher interest rates.

The post-election shift in expectations has left Asian stocks vulnerable to investors potentially rotating funds out of emerging markets to the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.4 per cent to hover just above its four-month low touched earlier in the week. It looks set to log its fourth straight week of losses.

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