The Sensex fell 0.4 percent on Friday, led by declines in Reliance Industries and Infosys , with the rupee's slump to new life lows hurting local stocks.
The rupee fell to a record low for a second consecutive session, past the psychologically important 57 to a dollar mark.
Shares in Reliance Industries fell 1.2 percent on continued concerns about gas output after Canada's Niko Resources Ltd. slashed the reserve estimate at the KG D6 block on Wednesday.
Shares in Infosys fell 0.7 percent after investment bank Jefferies says the Indian software services provider is "likely" to cut fiscal 2012/13 guidance to 6-8 percent growth from the current 8-10 percent.
The Sensex provisionally fell 0.4 percent to 16,967.68 points, recovering from an intraday fall of as much as 1.3 percent.
The Nifty provisionally fell 0.36 percent to 5,146.30 points.