Selling in realty, consumer durables, IT, oil & gas, auto, teck, FMCG and capital goods, dragged down the Sensex into negative zone despite positive inflation data.

As many as 23 stocks closed with losses led by Axis Bank, SBI, Hindalco, BHEL, RIL, ICICI Bank and ONGC.

Brokers said sentiment was weak on reports of foreign institutional investors (FIIs) and domestic institutional investors turning sellers.

Oil & Gas shares were at the forefront after fall in global crude oil prices after subdued US jobs data fuelled demand concerns and a cease-fire between Russia and Ukraine.

The NSE's 50-share barometer also hit a new all time intra-day peak of 7,929.05, surpassing its previous record of 7,922.70, which it hit on August 20.

The BSE benchmark Sensex on Thursday extended gains for the fourth straight session soaring by 184.28 points (or 0.71 per cent) to reclaim the 26,000-mark after two weeks.

According to Sebi data, banks are the top asset in portfolios of equity funds. A fall in interest rates and inflation may further encourage funds to add bank stocks.

The 30-share index of the Bombay Stock Exchange jumped over 80 points to close at 25,641.56, the highest since 26,100.08 reached on July 7. For the week, it has gained 617.21 points.

Brokers said softening of inflation has sparked off hope that the Reserve Bank will cut interest rate at its policy review next month.

Rising crude oil prices in global markets on escalating tensions in Iraq further dampened hopes of a rate cut by the Reserve Bank of India as WPI inflation in May rose to 5-month highs.

SBI Caps has been tasked by a 17-member consortium of lenders, led by SBI, to recover their dues running into over Rs 7,500 crore in principal alone from Kingfisher Airlines, promoted by Vjay Mallya.

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The BSE 30-share barometer resumed better and was trapped in a narrow breadth of over 335 points before settling at 21,775.32, a fall of 54.48 points, or 0.25 per cent.

The government raised an impressive Rs 9,550 crore from the stock market through the first- time sale of shares in the exchange traded fund (ETF) for Central public public sector enterprises (CPSEs) and offloading its nine- per cent stake in Axis Bank

The government is expected to garner over Rs 5,500 crore through the sale of 4.2 crore shares or 9 per cent stake. Shares of Axis Bank fell to the day's low of Rs 1,313.25, down Rs 44 a piece or 3.21 per cent over previous close.

Government will sell less than half of its stake held through SUUTI in the country's third largest private sector lender Axis Bank on Friday through a block deal for upto Rs 5,700 crore.

Book value represents that part of the accounting value of a business that will be left after debts are paid off. Several good stocks are trading below their book value. Some can give decent returns in 2014.

RBI under Rajan is talking of a radically new approach to achieving financial inclusion and creating a financial infrastructure for the new millennium. In his five months at the RBI's Mumbai headquarters, the central bank has come up with ideas that were never considered before.

The Sensex resumed higher at 20,429.16 and hovered in a range of 20,516.60 and 20,149.01 before ending at 20,366.82, showing a mere loss of 9.74 points, or 0.05 per cent. Nifty moved down by 14.85 points, or 0.24 per cent, to settle at 6,048.35.

Cipla shares saw a nearly 8 per cent drop after third quarter earnings lagged estimates. PSU  Coal India Ltd (CIL) fell 3.4 per cent on disappointing earnings. SBI ended 2.16 per cent down ahead of Q3'FY14 results on Friday. Overall, 26 of 30 Sensex constituents ended down.