Markets made a sharp recovery in the last leg of the trade as buying emerged in frontline shares such as Reliance Industries, Hindustan Unilever and Marutu Suzuki, helping the Sensex recover by 30 points.
Nifty opened in the green and moved between gains and losses before giving into selling pressure in the noon trades.
Nifty slipped below the 5740 level and touched a low of 5,706 for a brief period.
Buying emerged at lower levels in the last half an hour of trade which helped the Nifty close above the 200 Daily Moving Average (5740 mark).
The S&P CNX Nifty finally ended at 5750, down 36 points and the Sensex declined 156 points, at 19,134.
Markets ended lower for the fifth consecutive session and were down 2.4% for the week.
Indian markets have also underperformed Asian peers in the past week which posted gains due to weakness in the Dollar Index.
Shshank Mehta, Derivatives Strategist from Nirmal Bang said, "Call writers very were active at 5800 call which will be the next immediate resistance for Nifty."
Rajesh Iyer, Head Products & Research, Kotak Wealth Management said, "Indian markets have shown a mild correction this week on account of the F&O expiry.
In the near future Nifty should trade in a range, between 5500-6000. Volatility will continue because of the result season and fluctuating crude prices.
Forthcoming RBI policy could have an impact on Indian equities if RBI raises repo rate by 50 bps."
Asian markets also ended on a mixed note over tightening concerns from Beijing.
The Hang Seng finished down 0.4% at 23,721, bringing its weekly loss to 1.7%. China's main stock index snapped a five-day losing streak, ekeing out a 0.9% gain to close at 2,912.
The Nikkei, Japan's benchmark index ended at 9,850 up 1.7%.
Back in India, Bank Nifty recovered from day's low, the index touched a low of 11,406 as investors sold shares on corporate earnings concerns and expectations of 25-50 bps rate hike next week.
The index pared some losses to close at 11,484, down 201 points.
The BSE Banking index closed down 1.8%. Top losers from the banking space were Union Bank, down 5.8%, Bank of India declined 5% and Axis Bank, down 3.6%. Frontliners State Bank of India and HDFC Bank dipped almost 2% each.
BSE Capital Goods index also weighed on the markets, the index was down 2.7%. Shshank Mehta, Derivatives Strategist from Nirmal Bang said, "capital goods counters looked weak because there is a buzz in the market that international player Alstom's tie up with Shanghai Electric in boilers will create competition for BHEL."
BHEL was up 0.4%, but peer Larsen & Tourbo dipped 3.8%, dragging the Sensex down 44 points. Suzlon Energy declined 5% and Praj Industries was off 3.5%.
Crompton Greaves fell 10% after fourthquarter results disappointed. Net profit was up 5% at Rs 270 crore y-o-y and margins were hit due to higher input costs.
FMCG was the top sectoral gainer, up 0.9%; Dabur India and United Spirits were up over 2.5% each and Hindustan Unilever gained 2.2%.
Top losers on the Sensex were L&T, down 3.9%, Jindal Steel declined 3.6%, and ONGC was off 2.8%. Only 9 components on the Sensex were ended in the green, Hindustan Unilever was up 2.2%, Maruti Suzuki climbed 1.3% and Reliance Industries added 0.8%.
Broader markets also succumbed to profit booking, the midcap and smallcap indices were down 1% and 1.5% each.
Market breadth was negative, 1950 stocks declined for 940 stocks which advanced.