Asian shares were headed towards their worst quarterly performance in over five years on persistent concerns about the global credit crunch. By 0333 GMT Tokyo was down 1.5 percent, Seoul had slipped 0.2 percent and Hong Kong had lost 1.6 percent.
"The global cues are negative and plus there is inflation, because of which we may see a rise in the cash reserve ratio," said Ambareesh Baliga, vice-president at Karvy Stock Broking Ltd.
Indian inflation rose to its highest in nearly 14 months at 6.68 percent in mid-March, data showed on Friday, prompting markets to expect a policy response form the central bank, such as higher interest rates or increased reserve requirements for banks.
The benchmark 30-share BSE index rose 2.2 percent on Friday to 16,371.29 points. It gained 9.2 percent on the week, its first rise in four weeks and biggest in five months. The index is now 19 percent down this year, and nearly 23 percent below a record high of 21,206.77 hit on Jan 21.
The broader 50-share NSE index rose 2.31 percent to 4,942.00 on Friday. The Nifty April futures ended at 4,970.65, widening the premium to the spot to 28.65 points.
Foreign funds bought Indian shares worth $106.8 million on Thursday. They have sold a net $3 billion so far this year after buying more than $17 billion in 2007.