Shares finished nearly 1 per cent lower on Friday, their second consecutive day of fall, dragged down by ICICI Bank on concerns over its exposure to debt-laden Jaiprakash Group, while Reliance Industries fell ahead of its quarterly results later in the day.
ICICI Bank fell nearly 4 per cent after CARE downgraded Jaiprakash Associates debt, while Reliance Industries fell 1.6 per cent.
Lack of any concrete progress on key reforms including goods and services tax in the ongoing session of Indian parliament also dampened investor appetite for risk.
Falls also tracked lower Asian equities, which stumbled on Friday after a survey showed China's manufacturing activity crumbled to 15-month lows, rekindling concerns for the region's exports as the world's second-largest economy struggles to arrest a broad downturn.
"Market is certainly not very comfortable with the kind of activities which are happening in parliament, of no decisions, adjournments," Deven Choksey, managing director, KR Choksey Securities, said.
Selling in blue-chips weighed down the index. ICICI Bank fell 3.6 per cent while Larsen and Toubro that lost 1.31 per cent, struggled as well.
Tata Motors dropped 2.92 per cent to Rs 389.65.
Shares of Wipro Ltd, India's third-biggest software services exporter, fell about 3.6 per cent after the company reported its quarterly earnings on Thursday that were largely in-line with estimates.
However, financial services company IDFC gained 2.58 per cent to end at Rs 157.10 on getting a banking licence from the central bank.