Bse Sensex erased earlier gains to close flat on Friday, marking a third consecutive weekly fall, as blue-chips such as ITC were hit by profit-booking on continued signs that foreign investors' appetite for domestic shares is starting to wane.
Foreign institutional investors (FIIs) sold shares worth 598 million rupees ($9.5 million) on Thursday, snapping a 32-day buying streak that totalled 238.84 billion rupees, exchange and regulatory data show.
Signs that overseas funds are losing interest in Indian shares come amidst renewed fears the Federal Reserve will move to taper its monetary stimulus.
Caution is also setting in ahead of key economic indicators next week including gross domestic product data and fiscal deficit numbers.
"The only positive flow could come from some sort of change from overseas cues and that is where the big trigger lies," said Prakash Diwan, head of Institutional Clients Group at Asit C. Mehta Investment Intermediates Ltd.
The benchmark BSE index closed down 0.06 percent, or 11.66 points, at 20,217.39 points, falling 0.66 percent for the week.
The broader NSE index also closed down 0.06 percent, or 3.60 points, at 5,995.45, staying below the psychological 6,000 point mark. It fell 1 percent for the week. Profit-taking continued to weigh on recent blue-chip gainers. Tata Motors Ltd fell 2.35 percent on Friday and posted a 3.33 percent weekly fall, its biggest since the week ended on Aug. 23.
ITC ended 1.36 percent lower and was down 1.83 percent for the week.
Recently IPO-ed Search service provider Just Dial Ltd , which peaked to an all-time high of 1,438.70 rupees on Wednesday, gave up some gains falling for a second consecutive day. The stock closed down 3.81 percent, adding to its 6.96 percent fall on Thursday.
Among gainers, Cairn India Ltd closed 3.1 percent higher after the oil explorer said its board would meet on Tuesday to consider a buy back of shares.
Tea producer McLeod Russel India Ltd gained 1.56 percent as investors closed outstanding open positions in November futures contracts leading to a short-covering rally.
Shares in United Spirits Ltd, 25 percent owned by Diageo PLC, gained 4.44 percent after rating agency ICRA upgraded its rating on company's loans and other debt facilities to take into account Diageo Plc's takeover of the Indian spirits maker this year.
FACTORS TO WATCH
* Euro rises, Bunds extend falls
* Oil slips below $110 as investors eye Iran talks
* Stocks gain as Fed-fired volatility eases
* Foreign institutional investor flows