The stock market snapped a four-day strong gaining streak on Friday and fell by 61 points to 10,680.23, following selling partly triggered by disappointing first quarter results from Hindalco and MTNL.
Retailers as well as Foreign Institutional investors (FIIs) were believed to be selling at higher levels on the opening day of the August contract of Futures and Options.
The Bombay Stock Exchange (BSE) 30-share sensitive index, Sensex, turned volatile after a firm start and later swung between 10,787.65 and 10,603.83 before ending the day at 10,680.23 from Thursday's close of 10,741.59, a net fall of 61.36 points or 0.57 per cent.
The Sensex had risen by 655.68 points or 6.5 per cent in the last four trading sessions.
The National Stock Exchange's (NSE) S&P CNX Nifty also dropped by 25.35 points or 0.80 per cent to 3,130.80 from the previous close of 3,156.15.
FIIs had been engaged in covering short positions in derivatives during the last four days and have pumped in over Rs 3,000 crore.
Attributing selling pressure in the latter half of the day to unsatisfactory corporate announcements, stockbrokers said the first quarter earnings released by Hindalco and MTNL fell short of market expectations while FIIs slowed down inflows.
Bank shares, however, continued to attract keen interest and scored impressive gains.
Meanwhile, Asian markets ended firm. The Nikkei closed up by 163.09 points and the Hang Seng by 38.27 points.