Indian benchmark indices ended significantly lower on Friday as market sentiment remained cautious before the release of a key US jobs report, which could influence the US Federal Reserve's future rate cut decisions.

By the end of trading, the Sensex had dropped by 1,017 points, or 1.24%, closing at 81,183. The Nifty fell by 292 points, or 1.17%, to settle at 24,852.

The steep decline led to a decrease in the total market capitalization of all listed companies on the Bombay Stock Exchange (BSE), falling by nearly Rs 5.3 lakh crore to Rs 460.04 lakh crore. The previous day's market cap was Rs 465.3 lakh crore.

Among the major Sensex stocks, significant losses were recorded for SBI, ICICI Bank, NTPC, HCL Tech, Reliance, Tata Motors, ITC, Axis Bank, Infosys, L&T, M&M, Maruti Suzuki, Ultratech Cement, and Wipro.

Key contributors to the downturn included Bajaj Finance, Asian Paints, JSW Steel, and HUL. The decline was widespread across all sectors.

Indices for auto, PSU banks, financial services, media, energy, private banks, infrastructure, realty, and FMCG were among the hardest hit.

The Nifty midcap 100 index decreased by 946 points, or 1.59%, to 58,501, while the Nifty smallcap 100 index fell by 244 points, or 1.25%, to 19,276.

India’s representation in the MSCI Emerging Markets index has now exceeded China’s, marking its highest level yet. This development could prompt a strategic reduction in weight allocation due to India's comparatively high valuations.

On September 5, Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth Rs 688 crore, while domestic institutional investors purchased equities worth Rs 2,970 crore.

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