Mumbai: India's equity indices fell 1.5% on Friday, posting losses for the month, as outflows on account of MSCI index rebalancing triggered a late decline during the trading session. The extension of the tentative ceasefire deal by 60 days eased oil prices but did little to improve sentiment in equities, with Donald Trump yet to sign off on it.The NSE Nifty closed at 23,547.75, down 1.5%, or 359.40 points, while the BSE Sensex ended at 74,775.74, down 1.4% or 1,092.06 points. For May, the Nifty and Sensex slipped 1.9% and 2.8% lower, respectively.Both indices were on track to post modest gains on Friday but selling in the last 30 minutes sent shares tumbling."The MSCI rebalancing led to outflows worth ₹8,000-8,500 crore, which were slightly higher than previous instances, but that was due to float adjustments in certain names like Bajaj Finance, HUL, TCS, and many others," said Abhilash Pagaria, head of alternative and quantitative research, Nuvama Wealth. "This is a one-time new methodology adjustment that weighed on the market on Friday."When global index providers like MSCI add or remove stocks in their indices, passive funds tracking these are forced to buy or sell them in line with the new weights.AgenciesWeight rebalancing triggers ₹8-8.5kcr outflows, with heavy selling in last 30 minutes of tradingFear Gauge Jumps On Friday, Federal Bank, MCX, Nalco and Indian Bank were added to the MSCI Standard Index, while Hyundai Motor India, Jubilant FoodWorks, Kalyan Jewellers and RVNL were excluded.According to Nuvama Alternates, India's weight in the MSCI Standard Index is expected to remain broadly stable at around 12%, with the overall stock count unchanged as four got added and four were excluded.All sectoral indices ended lower on Friday with the IT index bucking the weak trend. Nifty Oil & gas dropped 2.5% while Nifty Metal and Auto indices fell around 2%. Nifty Consumer Durables and FMCG indices declined close to 1.5% while Bank Nifty slid 1.1% lower.Even before the sell-off linked to the MSCI index rejig, gains were measured in response to the provisional deal between the US and Iran."The deal for extension of ceasefire between the US and Iran is not yet signed and it doesn't seem that either of them is in a hurry to sign the deal either," said UR Bhat, cofounder and director, Alphaniti. "The nuclear material in Iran remains a point of contention and investors don't expect a concrete agreement immediately. If the stalemate continues and oil prices shoot up, then the market could see declines. However, if it is signed, then some respite is likely."Brent crude oil futures eased about 2% to nearly $90 on Friday after rising 0.5% on Thursday.The India VIX volatility index jumped 8% to 16.2 on Friday, suggesting traders are not convinced that risks have subsided. The measure was, however, down 9% in the week. "Nifty is stuck in a downward sloping range of around 24,000 levels on the higher side and 23,250-23,000 on the lower side," said Vipin Kumar, AVP, Globe Capital Market. "These levels are unlikely to be broken in the coming week."Foreign portfolio investors sold shares worth a net Rs 21,105.9 crore on Friday, while domestic institutional investors bought shares worth Rs 16,764.1 crore. In May, foreign investors sold shares worth Rs 49,192 crore."Overseas investors could continue to churn large-cap holdings. However, the broader market remains resilient and poised for outperformance," said Pagaria.Out of 4,463 shares traded on the BSE, 1,611 advanced, and 2,673 declined. The Nifty Midcap 150 index declined 1.4%, while the Nifty Smallcap 250 ended 0.7% lower. In the past week, the two gained 1% and 1.2%, respectively.