Investors also seemed cautious ahead of the RBI policy meet as they feel that repo rate might be increased amid inflation concerns, brokers said.
The last week's budget proposal of 10 per cent long-term capital gains (LTCG) tax on equities and overshooting of fiscal deficit target also quashed investor optimism.
However, the government today tried to downplay the impact of budgetary proposals on domestic equities and attributed the current downtrend to global market cues.
The barometer had lost 1,216.50 points in the previous four sessions, following nervous offloading of positions by participants, triggered by imposition of long-term capital gains of 10 per cent on equities in the Budget 2018.
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Also, the 50-share NSE Nifty settled lower by 94.05 points, or 0.87 per cent, at 10,666.55 after shuttling between 10,586.80 and 10,702.75.
Foreign portfolio investors, however, remained buyers on the Indian bourses as they bought shares worth Rs 950 crore on Friday. But domestic institutional investors (DIIs) sold equities worth Rs 508.78 crore, according to provisional data from the exchanges.
Brent oil hovering around USD 70 a barrel in global market too had its shadow on the sentiments.
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