BSE Sensex falls 562 points ahead of US jobs report

The BSE Sensex fell more than 2 per cent on Friday to its lowest in nearly 14 months on caution ahead of a key US jobs report due later in the day.

A strong jobs number could cement optimism on the global economy and boost share prices but it could rekindle speculation of an early rate hike by the Federal Reserve, which could hurt risk assets, particularly in emerging economies.

Strengthening crude oil prices and weakening of rupee value also dented investor sentiments. The BSE Sensex closed 2.18 per cent down at 25,201.90, its lowest since July 15, 2014. The broader Nifty closed 2.15 per cent lower at 7,655.05, its lowest since August 11, 2014.

"The uncertainty over the US Fed rate hike is spooking global markets and the Nifty is no exception," said Arun Gopalan, vice president at brokerage Systematix Shares & Stocks. "We could witness further downside on the Nifty if the Fed hikes rates in September."

Both indices closed at their fourth straight weekly loss, after rising over 1 per cent on Thursday.

ICICI Bank fell 3.37 per cent, while Housing Development Finance Corp dropped 2.39 per cent. Market heavyweight Reliance Industries Ltd was down 2.13 per cent. IT stocks Infosys and TCS fell 2.44 and 2.14 per cent, respectively. Cipla fell 1.13 per cent. The drugmaker earlier announced the acquisition of two generics businesses in the United States.

Asian shares extended losses on Friday as caution over a US jobs report overshadowed signals from the European Central Bank that it is willing to take further steps to shore up the European economy. China's financial markets were closed on Friday for a national holiday.