Mumbai, Nov 8 (IANS): Selling intensified towards closing bell on Friday after markets' upward momentum was hit by Moody's downgrade of India's sovereign outlook from 'stable' to 'negative' citing increasing risks to the country's economic growth.

At noon, markets appeared to have taken the downgrade in their stride briefly as Sensex scaled a fresh high of 40,749.33. But a series of poor earning results added to the already tensed investors' sentiments, leading to a sharp dip.

Poor numbers by state-owned GAIL, Bharat Forge and Allahabad Bank along with Moody's downgrade hurt the momentum. Consequently, Sensex settled 330.13 points lower at 40,323.61 while the broader Nifty lost 106.35 points to end at 11,905.70.

The government in response to the rating downgrade said India continues to be among the fastest growing major economies in the world, and that the country's relative standing remained unaffected.

There were only six gainers during Friday's volatile trade session. Yes Bank settled 4.66 per cent higher followed by IndusInd Bank which jumped 2.98 per cent. ICICI Bank, Kotak Mahindra Bank, Tech Mahindra and HCL Tech gained up to 2 per cent.

The top losers were Sun Pharma, Vedanta, ONGC, TCS and Hindustan Uniliver which ended lower in the range of 2-5 per cent.