Mumbai, Nov 24 (IANS): Heightened chances of a US rate hike, continued outflows of foreign funds and caution over the ongoing derivatives expiry dragged the Indian equity markets lower on Thursday.

Besides, massive depreciation in rupee, which touched its new intra-day record low of 68.86 to a US dollar, and political logjam over the demonetisation drive eroded investors' confidence.

The key Indian indices provisionally closed with losses of more than half a per cent each, as banking, automobile and healthcare stocks witnessed heavy selling pressure.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) receded by 67.80 points or 0.84 per cent to 7,965.50 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,049.14 points, provisionally closed at 25,860.17 points (at 3.30 p.m.) -- down 191.64 points or 0.74 per cent from the previous close at 26,051.81 points.

The Sensex touched a high of 26,049.14 points and a low of 25,810.97 points during the intra-day trade.

In contrast, the BSE market breadth was tilted in favour of the bulls -- with 1,328 advances and 1,203 declines.

On Wednesday, the equity markets closed in the green due to positive global cues, coupled with short covering and value buying.

The barometer index was up by 91.03 points or 0.35 per cent, whereas the NSE Nifty edged up by 31 points or 0.39 per cent.