People walk past the BSE building displaying India's benchmark share index on its facade, in Mumbai. (Reuters)
Shares fell on Friday to mark their biggest weekly decline in eight as profit-taking hit blue chips such as Reliance Industries for a third consecutive day, extending the weak start to 2014.
The benchmark BSE index has fallen in each of the three trading sessions of the new year, declining 1.35 percent after gaining 8.9 percent last year on the back of strong foreign buying.
Losses also tracked lower Asian shares after a sudden reversal in some very popular, and thus crowded, trades sparked a bout of global risk aversion.
Caution is also setting in ahead of the start of the corporate earnings reporting season, with Infosys Ltd's results on Dec. 10.
"Q3 earnings would be slightly better than Q2. One should just focus on good quality businesses amid this volatility like ITC, Lupin" said Vivek Mahajan, head of research at Aditya Birla Money.
The benchmark BSE index fell 0.18 percent, or 37 points, to end at 20,851.33 and a weekly fall of 1.6 percent.
The broader NSE index fell 0.16 percent, or 10 points, to end at 6,211.15. It also ended down 1.6 percent for the week.
Both indexes marked their biggest weekly fall since the week ended Nov. 8.
Reliance Industries Ltd shares fell 1.2 percent, while Larsen and Toubro Ltd ended 2.3 percent lower.
Among other blue chips, ICICI Bank Ltd fell 0.8 percent, while Mahindra and Mahindra Ltd slumped 3.8 percent.
ICICI Bank has retraced almost the entire gain of 2.9 percent made in December over the last three trading sessions.
Tata Motors Ltd fell 2.6 percent after December sales fell by 42 percent to 37,852 vehicles.
Among stocks that gained, Multi Commodity Exchange of India Ltd surged 17.8 percent on acquisition hopes, after the Bombay Bullion Association said on Wednesday it was considering buying a 5 percent stake in the company.
Software exporters were also in demand ahead of Infosys Oct-Dec results next week. Infosys ended 2.4 percent higher, while Tata Consultancy Services Ltd rose 2.6 percent.
Factors To Watch
* Yen firms vs dollar and euro in short-covering rally
* Brent rises past $108; Libya, US inventories in focus
* Asia shares roiled by risk aversion; yen rallies