The BSE Sensex fell for a second session on Friday to its lowest close in two months, led by declines in HDFC after Goldman Sachs downgraded the stock to "sell", while ITC fell on fears of a hike in excise duty for tobacco in the upcoming budget.
Shares are expected to be range-bound ahead of the 2013/14 budget, to be unveiled on February 28, and investors will watch whether the finance minister will manage to impose fiscal discipline even as the government tries to revive growth.
India has targeted a fiscal deficit of 4.8 percent of gross domestic product for the year starting in April, but budget details will also be key given an austerity push could add to inflationary pressures, hampering chances for rapid interest rate cuts.
Global risk factors will also be key given domestic shares on Thursday posted their biggest fall since July on worries about whether the U.S. Federal Reserve will continue its bond buying programme.
"One should closes watch how the finance misister balances populist and pragmatic expectations, especially that on fiscal consolidation," said Vijay Kedia, director at private wealth management firm Kedia Securities.
Announcements have to turn into action otherwise global risk aversion might lead to redemptions even at FII desks, Kedia added.
The benchmark BSE Sensex fell 0.04 percent, or 8.35 points, to end at 19,317.01, after falling 0.77 percent for the week, marking a fourth week of falls.
The broader Nifty fell 0.03 percent, or 1.95 points, to end at 5,850.30, also ending 0.63 percent lower for the week.
Housing Development Finance Corp Ltd
Aviation stocks including Spicejet
Among other stocks that gained, Sun Pharmaceutical Industries