India's benchmark Sensex index fell 2.96 per cent in trading Thursday on heavy selling by funds and investors.

The 30-share index lost 434.50 points to close the day's trading at 14,243.73 points. Almost all the sectoral indices were in the red.

Similarly, the broader S&P CNX Nifty of the National Stock Exchange was also down by 131.9 points to 4,283.85, a loss of 2.99 per cent.

Market analysts said selling pressure gathered momentum on fears that the country's inflation may rise further from the previous week's level of 12.44 per cent.

A weak global stock market also influenced the market sentiments, they said.