Shares in energy major Reliance fell 4.3 percent over worries of lower reserve estimates at its key gas block off India's east coast, and after television reports that a former upstream regulator's house was searched.
Top mobile operator Bharti fell 2.9 percent after brokerage CLSA downgraded the stock.
Traders and analysts said despite the odd hiccup, the positive momentum from the week is likely to continue, helped by a revival in interest from foreign institutional investors (FIIs).
"There is some profit taking, but positive FII inflow again is a mood changer," said K.K. Mital, chief executive for portfolio management services at Globe Capital Market.
"Some more flows are expected in India, given the global scenario, so we should see some momentum."
Foreign institutional investors net bought shares worth $1.1 billion in the last five sessions till June 30, although they have been buyers for only around $320 million so far in 2011. They had pumped in a record $29.3 billion in 2010.
Greece's approval of austerity measures this week has boosted risk appetite, while an unexpected jump in business activity in the US Midwest helped quell fears about an economic slowdown. The 30-share BSE index closed down 0.44 percent, or 83.07 points, at 18,762.80 points, after having risen nearly 1 percent in early trade. Only 17 of its components ended higher.
The market ended 2.9 percent higher for the week. It had gained 2.1 percent in the previous week. The BSE index is down 8.5 percent in 2011, making it one of the worst performing major markets in the world.
In the June quarter, the index fell 3.1 percent, its second straight quarterly decline after rising for the previous eight, as spiralling inflation and a slowdown in economic growth dispelled investors.
"I don't expect a sharp fall from these levels if there's no shocker on monsoon and corporate earnings fronts," said Neeraj Dewan, director with Quantum Securities in New Delhi.
Shares in Reliance Industries, which have the highest weightage in the index, fell after television reports that a former upstream regulator's house had been searched.
A report by a state auditor had earlier accused the regulator's office of approving inflated development costs for several exploration firms, newspaper reports have said.
Earlier on Friday, Bank of America-Merrill Lynch cut its price objective for the stock by 7 percent due to lowering of reserve estimates for Reliance's KG D6 block, off India's east coast.
The stock is down nearly 19 percent so far this year, mainly on worries over declining gas output at the KG block.
State-run Oil and Natural Gas Corp rallied as much as 6 percent in opening deals, bolstered by hopes for a reduction in the explorer's royalty burden for a gas field in western Rajasthan state.
It ended 0.8 percent higher.
The Indian cabinet on Thursday conditionally approved Vedanta Resources stake buy in Cairn Energy's Indian business, with a rider that royalty payments be shared between ONGC and Cairn India.
Top mobile operator Bharti fell as much as 2.9 percent, its biggest loss in nearly two months, after brokerage CLSA downgraded the stock to "underperforms" from "outperform," saying it did not see any upside to its near-term earnings estimates.
Leading car maker Maruti Suzuki fell 1.4 percent to 1,143.15 rupees after it posted an 8.8 percent drop in June sales to 80,298 vehicles its first fall since December 2008.
Infosys Technologies, India's No. 2 software services exporter, rose 0.8 percent to 2,934.15 rupees as encouraging data on Thursday from the United States boosted outsourcing demand prospects.
The world's largest economy accounts for more than half of the earnings of India's $60 billion outsourcing sector.
The 50-share Nifty index slipped 0.36 percent to 5,627.20 points.
In the broader market, 853 advances led 549 declines on volume of 631.9 million shares.
Cox & Kings rose 4.2 percent to 189.45 rupees after the Business Standard newspaper reported the company is planning to raise 15 billion rupees from foreign institutional investors and has sought government approval.
State lender Power Finance Corp rose 4.4 percent to 191.85 rupees after Goldman Sachs set a price target of 210 rupees for the stock, after initiating coverage with a "neutral" rating.
MAIN TOP 3 BY VOLUME ON NSE
Lanco Infratech on 27.8 million shares
GTL Ltd on 22.6 million shares
DLF on 18.9 million shares
Copyright Reuters, 2011