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.
Banks fell on caution ahead of the policy review, with HDFC Bank
Property developer DLF
Shares in Jet 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.