the most in a day since October 2011.
Traders say fading December-quarter earnings optimism alongside a factored view of stable rates by the central bank at its Jan. 28 meeting after headline inflation fell to five-month lows, might induce some investors to lock in profits.
Institutional flows in cash shares as well as index futures paint a picture of indecision from overseas investors, which may also weigh on sentiment, dealers add.
"Nifty (NSE index) continues to trade in a broad range of 6,000 and 6,400. So on the higher end of the range, we would see profit-booking, and on the lower end of the range buying interest will come in," said Milan Bavishi, head of research at Inventure Growth and Securities.
The benchmark BSE index fell 0.95 percent, or 201.56 points, to end at 21,063.62, retreating for a second consecutive day from its highest level since Dec.
The broader NSE index lost 0.91 percent, or 57.25 points, to end at 6,261.65, closing below the psychologically important 6,300 level.
Both the indexes, however, notched up a weekly gain of nearly 1.5 percent, their first in three weeks, helped by a rally in rate-sensitive stocks ahead of inflation data.
Among other IT stocks, Wipro Ltd fell 3.3 percent ahead of its results later in the day, HCL Technologies Ltd fell 0.8 percent and Tech Mahindra Ltd ended 4.9 percent lower.
Mobile carriers slumped for a second day on concerns over possible high bidding prices at a spectrum auction next month after eight companies applied to bid, signalling much stronger competition than expected.
Idea Cellular Ltd fell 3.2 percent, adding to Thursday's 7.2 percent decline, while Bharti Airtel Ltd fell 1.5 percent after a 4.8 percent slump in the previous session.
Coal India shares fell 10 percent after going ex-dividend on Friday.
State-run Coal India had said on Jan. 14 it would pay an interim dividend of 29 rupees a share, or 183.2 billion rupees, in the current fiscal year ending on March 31 Reliance Industries Ltd fell 0.2 percent,