Tata Steel, Sun Pharma, Nestle India, Kotak Mahindra Bank & Tech Mahindra were among the top gainers. While Powergrid & Bajaj Auto were the losers.
Asian stocks are mostly trading higher on Friday following overnight gains for tech stocks stateside as the Nasdaq Composite rebounded.
Sensex closed at 59,919.69, down 433.13 points or 0.72%, while the Nifty declined 143.60 points or 0.80% to end the day at 17,873.60.
At 10:30am, Sensex tanked 563.92 points or 0.93% to 59,788.90, while Nifty stood at 17,848.70, down 168.50 points or 0.94%.
Wall Street closed sharply lower on Wednesday as surging consumer prices curbed investor risk appetite.
Nifty PSU Bank was the top laggard with losses of 2.35%, while the Nifty Metal index tanked 1.76% and Nifty Realty index slipped 1.36%.
The 'buy on dips' strategy of retail investors and DIIs is countered with the 'sell on rally' strategy of FIIs.
China's consumer inflation for October rose 1.5% from last year. The producer price index for October surged 13.5% from last year.
Sensex settled at 60,433.45, down 112.16 points or 0.19%, while the broader NSE Nifty declined 24.30 points or 0.13% to end at 18,044.25
The broader market outperformed. The S&P BSE Mid-Cap index gained 0.81% while the S&P BSE Small-Cap index added 0.67%.