The benchmark Sensex on Friday fell for the first time in eight days, dropping 230.86 points to close at 29,231.41 on selling in bluechips, including RIL, and caution ahead of the the Union budget.
Globally, Europe's main stock markets opened lower as eurozone members prepared for crunch talks with Greece on a renegotiation of the country's bailout terms.
Asian stock indices, however, closed mostly up. The BSE Sensex resumed lower at 29,446.21 and hovered in a range of 29,462.09 and 29,178.26 before ending at 29,231.41, showing a sharp loss of 230.86 points or 0.78%.
Traders said caution was seen after the bluechip index zoomed by 1,234.88 points, or 4.37%, in the previous seven days.
This led to profit-booking in many recent gainers which surged on Budget hopes.
Shares of Reliance Industries (RIL) witnessed selling pressure, falling over three per cent, after Delhi Police yesterday had detained a RIL staffer in connection with alleged official document theft in the oil ministry.
Major contributors to the Sensex's loss include RIL (57.17 points), ICICI Bank (49.37 points), Infosys (47.21 points), HDFC (35.69 points) and L&T (20.76 points). The 50-share NSE Nifty also dropped by 61.70 points, or 0.69%, to close at 8,833.60.
In broader markets, shares of SpiceJet surged nearly 20% after fair trade watchdog CCI approved original promoter Ajay Singh's plan to acquire controlling stake in the carrier.
Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 1542.70 crore on Thursday as per provisional data released by the stock exchanges.
Domestic Institutional Investors (DIIs) had sold shares worth a net Rs 195.74 crore.