The Sensex, which had gained 1,265 points in eight days in which it hit record highs in two straight days, climbed to hit yet another life-time high of 26,300.17 in early trade.
However, the gains proved to be short-lived as FIIs and domestic funds took some profit off the table in recent out-performers. The BSE index closed at 26,126.75, down 145.10 points or 0.55 per cent.
Yesterday, the 30-share bluechip benchmark had ended at its all-time closing high of 26,271.85 and had also hit intra-day high of 26,292.66.
The 50-scrip NSE Nifty today after hitting an intra-day record high of 7,840.95 in the opening trade, slipped below the 7,800-mark as selling pressure was witnessed. It finally ended the session 40.15 points, or 0.51 per cent lower at 7,790.45. Yesterday, the gauge concluded at record 7,830.60.
The Nifty had gained 376.45 points, or 5.05 per cent, in previous eight sessions.
Traders said the market was in an "over-bought" position and adopted a cautious approach and preferred to lighten some positions. Selling was more pronounced in realty, metal, power, PSU, auto and oil and gas sector stocks, which pulled down the Sensex and Nifty from record highs.
Wipro's scrip tumbled about 4.5 per cent and Infosys shed 0.89 per cent. Wipro's earnings yesterday failed to beat expectations, analysts said.
Tata Motors and BHEL were among the biggest Sensex losers. Heavyweights like ICICI Bank and RIL also slipped.
Bucking the trend, stocks of healthcare and FMCG sectors continued their upward journey on sustained buying activity.
Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities: Although geopolitical concerns continued to prevail in global markets, equity markets ended in the positive zone for the week. Earnings season has been good in the US with Boeing and Apple announcing robust earnings. Sensex outperformed other global equity indices on receding concerns related to monsoons and crude oil prices. The inflation data announced for June indicated weakening of inflation, which was taken positively. During the week, Axis bank, HDFC and HDFC Bank reported their quarterly numbers which were largely in line with expectations. Going into next week, we have numbers from L&T to start with.
* BSE index falls 0.55 pct; NSE ends 0.51 pct lower
* Foreign investor sales of index futures, options hit
* Wipro shares fall as U.S. revenue growth lags rivals
* Biocon slumps after earnings disappoint
Indian shares retreat from record highs on profit taking
(Reuters) India's broader NSE index fell on Friday after hitting a record high for a third straight day as investors took profits in blue-chips such as ICICI Bank , while IT outsourcing firms declined after Wipro's U.S. dollar revenue growth lagged rivals.
The stock markets also tracked global shares lower after a week of largely reassuring economic signals but rising political tensions.
Sentiment was also hit as foreign portfolio investors sold 2.80 billion rupees of Indian index futures and options contracts on Thursday.
In the near term, the markets would be driven by the ongoing earnings season, with Larsen & Toubro, ICICI Bank and Maruti Suzuki India reporting results in the coming week and the central bank's policy review on Aug. 5.
"Risk reward has become slightly unfavourable. Correction is part of the course. But, it's still a buy-on-dips market," said Jagannadham Thunuguntla, chief strategist and head of research at brokerage SMC Global Securities.
The broader NSE index fell 0.51 percent, or 40.15 points, to end at 7,790.45.
Still, the index rose 1.65 percent for the week, marking its second consecutive weekly gain. The NSE earlier rose 0.13 percent to hit its third consecutive record high at 7,840.95.
The benchmark BSE index lost 0.55 percent, or 145.10 points, to end at 26,126.75, while rising 1.9 percent for the week.
It earlier rose 0.1 percent to hit its second straight all-time high at 26,300.17.
A bout of profit-taking hit Indian shares on Friday, sending ICICI Bank Ltd down 2 percent after the stock had gained 12.1 percent over the past eight sessions, while Hindalco Industries Ltd fell 3.1 percent on profit-taking after gaining in the last three sessions.
Meanwhile Wipro Ltd fell 4.5 percent after the software services exporter's U.S. dollar revenue growth in June-quarter lagged its larger rivals.
Infosys Ltd lost 0.9 percent, while Tech Mahindra fell 0.1 percent.
Biocon Ltd slumped 7.3 percent after June-quarter earnings lagged some analysts' estimates.
Motherson Sumi Systems Ltd fell 1 percent after Bank of America Merrill Lynch downgraded the stock, citing demanding valuations.
However, defensive stocks such as consumer and healthcare gained on portfolio de-risking.
Hindustan Unilever added 3.2 percent, while Sun Pharmaceutical Industries gained 4.5 percent.
FACTORS TO WATCH
* Euro battling losses after poor German data
* Oil flat around $107; ample supply offsets risk premium
* Euro hit, shares subdued