Why current doesn't flow when negative voltage is applied to diode?

A normal (non zener) diode only conducts in one direction, when the anode is more positive than the cathode. This is called forward bias, and it occurs between 0.6 and 1.4 volts, depending on the specification of the diode.

In the reverse bias condition, with the cathode more positive than the anode, the diode does not conduct, except for minor leakage current, until it reaches its breakdown voltage. At that point, normal diodes1, unless current limited, will self-destruct. The reverse breakdown voltage is usually much more than the forward bias voltage, typically hundreds or thousands of volts reverse compared to around one volt forward. As a result, diodes, as used in rectifier circuits, will only conduct on the positive half-cycle of AC power.

If you want conduction in both directions, in a rectifier, you need two diodes and a center tapped transformer, or four diodes in a bridge configuration (one phase; six diodes for three phase) in order to conduct on every half line cycle.

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1Zener diodes, on the other hand are designed to conduct in a controlled fashion in the reverse bias condition due to PN junction doping that allows reverse breakdown without destruction. Zener diodes are used in regulator circuits.