Mumbai: Markets came off 17-month highs after benchmark BSE Sensex plunged 248 points to 28,797.25, tracking weakness in global peers after North Korea tested a nuclear warhead, while domestic investors remained on the sidelines ahead of key macroeconomic data.
Sentiment also remained subdued amid uncertainty over the European Central Bank's (ECB) failure to deliver on new stimulus measures.
The broader markets too felt the heat with BSE mid-cap and small-cap indices falling 0.99 percent and 0.47 percent, respectively.
On a weekly basis, the Sensex climbed 265.14 points or 0.92 percent and the NSE Nifty rose 57.05 points or 0.64 percent. Both indices recorded second weekly gains.
Shares of Yes Bank plunged over 4 per cent to Rs 1,277.25 after the company deferred plans to raise USD 1 billion, citing extreme volatility due to misinterpretation of new QIP guidelines.
India's largest steelmaker SAIL plunged 6 per cent as the company's standalone net loss widened to Rs 534.92 crore in June quarter.
"Indian markets had a soft ending to a stupendous week, with crucial IIP and CPI data releases scheduled Monday. ECB's decision on stimulus weighed on global markets but FII inflows and value buying continue to support prices," said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial.
The 30-share Sensex after opening higher at 29,062.90, slipped into negative zone to touch a low of 28,755.08, before settling 248.03 points or 0.85 percent down at 28,797.25.
The 50-issue NSE Nifty cracked below 8,900 by falling 85.80 points or 0.96 percent to end at 8,866.70.
A cautious stance by investors ahead of IIP and inflation data, slated for next week, also influenced trading sentiment.
Overseas, Asian stocks ended lower after the ECB surprised markets yesterday by deciding not to extend the deadline of its bond-buying program, while North Korea successfully testing a nuclear warhead today also spooked global investors.
Key indices in Asia, like China, Singapore, South Korea and Taiwan ended lower by 0.55 percent to 1.25 percent.
Europe was also lower with key indices in France, Germany and the UK down between 0.09 percent and 0.27 percent.