The BSE Sensex fell on Friday to mark its first weekly fall in five as Hindustan Unilever slumped after its June-quarter sales missed forecast, while banks such as HDFC Bank fell on caution ahead of the RBI's policy review next week.
The BSE bankex slumped 4.7 percent in the week after the RBI unveiled additional measures to drain cash in order to defend the rupee, keeping bond yields elevated and sparking concerns about borrowing costs.
Focus now shifts to the Reserve Bank of India's policy review on Tuesday. Although investors do not expect the central bank to announce a hike in interest rates or the cash reserve ratio they will closely scrutinise its statement for clues about future action.
"Market doesn't look encouraging in the near term as stress in broader economy continues after RBI's steps to control exchange rates," said Vaibhav Sanghavi, director at Ambit Investment Advisors Pvt Ltd.
The Sensex fell 0.29 percent, or 56.57 points, to end at 19,748.19, retreating for a third consecutive session after hitting its highest close since January 2011 on Tuesday.
The Sensex has dropped 2 percent for the week.
The Nifty fell 0.36 percent, or 21.30 points, to end at 5,886.20, falling 2.4 percent for the week.
Hindustan Unilever , the Indian unit of Anglo-Dutch Unilever Plc, fell 3.5 percent as its June-quarter sales volumes disappointed investors.
Banks fell on caution ahead of the policy review, with HDFC Bank ending down 1.5 percent, while State Bank of India lost 1.8 percent.
Maruti Suzuki failed to hold on to earlier gains and fell 2.7 percent after analysts raised concerns about the carmaker's cautious outlook on car sales.
Reliance Infrastructure fell 1.6 percent while Ranbaxy Laboratories ended 1.9 percent down as brokers expected both stocks to be removed from the Nifty at a review next month.
Property developer DLF fell 1.5 percent after Citigroup downgraded the stock to "sell" from "neutral", citing high leverage and mounting interest costs.
However, ITC rose 2.6 percent after a 4.5 percent fall on Thursday as the drop following its first-quarter earnings was seen as overdone.
Shares in Jet Airways surged 17.4 percent on Friday after traders said the Foreign Investment Promotion Board (FIPB) was likely to approve a planned stake sale to Etihad Airways.
Officials of Jet Airways and Etihad Airways were not immediately reachable for comment on the market speculation. A spokesman for the finance ministry, which oversees FIPB, declined to comment.
Biocon gained 7.3 percent after saying late on Thursday its June-quarter net profit rose 19 percent, beating consensus estimates.