On the other hand, the National Stock Exchange index Nifty hit the 7,800-mark by posting a gain of 66.20 points to 7,854.30.

The Sensex touched a high of 25,875.96 points and a low of 25,602.45 points in the intra-day trade so far. The German DAX dropped 0.9 percent, France’s CAC 40 index tumbled 1.5 percent and the U.K.’s FTSE 100 shed 1.2 percent. Overall, the market breadth remained positive, with seven out of every 10 BSE stocks trading in green. “Investors remain wary of taking positions before the weekend”, Agrawal said.

“Even though the markets have priced-in a below-average IIP on account of a decline in eight core industries (ECI), there is still anxiety over the extent of the downfall, especially given the concerns on global slowdown”, Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS. The government will on Friday probably say industrial output increased 3.6% in July, according to the median of 33 analyst estimates in a Bloomberg survey. The ECI’s constituents contribute a whopping 38 percent to the IIP.

The European markets broke a three-session winning streak on Thursday as downbeat machinery orders figures out of Japan and mixed Chinese data on consumer inflation and producer prices stoked worries about global growth.

The continued depreciation in rupee value also impacted investor sentiments. “We reiterate our view that traders shouldn’t be aggressively participating in this bounce as we are not interpreting this as a trend reversal sign”.

Metal, capital goods, auto, oil&gas and power sector stocks succumbed to profit-booking.

The BSE Healthcare index and the Fast Moving Consumer Goods index were the laggards for the week, with losses of 1.3% each.

The S&P BSE IT index gained by 47.82 points, FMCG index rose by 31.11 points and healthcare index was higher by 28.22 points.

Sensex had gathered 825.77 points in last two sessions.

Shanghai Composite inched lower by 0.1 per cent. The domestic factory output numbers will be released post the market hours of Friday.

Despite today’s fall, Tata Motors was the best performing stock for the week in the Sensex with gains of 7%.