Snapping its three-session winning streak, the 30-share BSE Sensitive index (Sensex) ended the day with a loss of 43.35 points, or 0.76%, at 5,672.27. The benchmark index, which had risen 134.13 points in the last three sessions, gained 31.21 points for the week.
The NSE S&P CNX Nifty index shed 13.20 points to end at 1,786.90.
Volumes on the bourses were modest, with shares worth Rs 1,803.42 crore having traded on BSE on Friday, compared to 2,025.35 crore on Thursday. The breadth of the market was negative with 1,145 losers and 996 gainers.
Metal stocks led a fall in the market on Friday on fears of a slowdown in Chinese demand after China raised domestic interest rates on Thursday, dealers from domestic brokerages informed. The BSE Metals index shed a huge 125.40 points, or 2.52%, to end at 4,853.77. Market players took the opportunity to book profit in blue chips after recent gains.
Yet, private setor banking stocks rose after finance minister P Chidambaram said that foreign banks would be allowed to acquire up to 10% a year in private banks.
Players feel that Chinas decision to slow down its economy would hurt global metals prices, as global commodity prices have been driven mainly by the huge demand from China in the last couple of years.
Hindalco (down 3.27% to Rs 1,187.10) ended lower coming off its days high of Rs 1,220 on selling pressure after the Aditya Birla Group non-ferrous metals (aluminium and copper) major posted a modest 9.92% rise in net profit.
Tata Steel (down 2.36% to Rs 287.65) ended lower moments before the announcement of quarterly results. Steel Authority of India (down 1.50% to Rs 49.35) ended lower - off its days high of Rs 51 - on selling at higher levels.
Heavyweight Reliance Industries (down 1.93% to Rs 529.25) also lost ground as selling pressure accentuated on the counter amid worries that a probable slowdown in Chinese demand may affect petrochemicals prices, too.