Markets ended lower on Friday as investors booked profits after benchmark share indices gained nearly 6% in last 14 trading sessions following the government's reforms to attract foreign direct investment in retail, aviation and financial sectors.
Financials and software shares were the top losers.
The 30-share Sensex ended down 120 points at 18,938 and the 50-share Nifty ended down 41 points at 5,747. The Sensex ended above 19,000 on Thursday gaining over 1000 points or 5.9% since September 12, 2012.
Meanwhile, the IMF has cut India's growth forecast to 6% for 2013 versus a previous forecast of 6.6%
Asian shares rose as investor risk aversion eased after the European Central Bank said it was ready to buy bonds of troubled euro zone countries, while markets awaited a key U.S. jobs report.
Japan's Nikkei average hit a one-week high on Friday, lifted by gains in some battered cyclical stocks, but Nikon Corp tumbled on reports of poor earnings and carmakers were sold off on concern about plummeting sales in China.
Jakarta Composite, Hang Seng, Nikkei and Straits Times up 0.4-0.9% led the pack in the region.
European shares firmed up on hopes of better-than-expected US jobs data due for release later today. The FTSE-100, CAC-40 and DAX were up 0.4-0.8% each.
Among the sectoral indices, IT, Bankex and Healthcare were the top losers down 1-1.6% each while Consumer Durables, Auto and FMCG indices ended up 0.6% each.
HDFC was the top Sensex loser down 4.9% at Rs 750 on back of multiple block deals at a discount on the NSE and BSE.
According to reports, global private equity major, Carlyle Group, offloaded its 3.71% residual stake for about Rs 4,500 crore.
Bank shares also witnessed profit taking after sharp gains recently. ICICI Bank, HDFC Bank and SBI ended down 0.2-1.6% each.
Software shares were down on concerns that the sharp appreciation in the Indian rupee against the US dollar would hurt revenues.
All major companies earn most of their revenues from export of software to the US. TCS, Wipro and Infosys ended down 0.9-2.4% each.
Gains in auto and FMCG stocks helped markets recover from their day lows. Tata Motors ended up 2.2% while Mahindra & Mahindra gained 1.2%. FMCG majors Hindustan Unilever gained 1.6% while ITC ended with marginal gains.
Index heavyweight Reliance Industries also ended 0.6% higher.
Among other stocks, Emkay Global Financial Services ended in 10% lower circuit at Rs 31.10 after the National Stock Exchange blamed brokerage firm for the erroneous trades amounting of over Rs 650 crore.
"The market circuit filter got triggered due to entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs 650 crore. These orders have been entered by a trading member Emkay Global Financial Services on behalf of an institutional client," NSE said in a statement.
Adani Power has dipped 3% to end at Rs 53.50 on reports that the promoter plans to sell part of its holding through the stock exchange mechanism on Monday, October 8.
IVRCL has tanked 6.1% to end at Rs 44.80, extending its previous day's 6% fall, after Essel Group sold more than 5% stake in the infrastructure company through open market transaction for Rs 68 crore on Thursday.
Housing Development and Infrastructure (HDIL) ended 1.8% up at Rs 109, extending its Thursday's 6% rally, in an otherwise weak market after foreign investors bought over two million shares of real estate firm for Rs 25 crore via bulk deal.
In the broader markets, the Mid-cap index ended down 0.8% while the Small-cap eased 0.9%.
The market breadth was negative. 1,786 stocks declines as against 1,076 advances on the BSE.