After three weeks of consistent gains, key Indian equity indices were pulled lower during the trade period ended Friday due to negative global cues, broadly weak quarterly results and a depreciating rupee.
Besides, "ambiguity" surrounding the new economic policies of newly-elected president Donald Trump in the US spooked market participants across the world.
On the global front, healthy data on China's fourth-quarter economic growth, the European Central Bank keeping key interest rates unchanged, and Federal Reserve Chair Janet Yellen's less hawkish policy stance could not cheer the markets.
Even the central government's nod for listing five general insurance companies and hopes of positive incentives in the upcoming Union Budget could not buoy investors' sentiments.
Thus, the key domestic indices closed the trade week with losses of more than half a per cent each as profit booking and prolonged outflow of foreign funds capped gains.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE plunged by 203.56 points or 0.75 per cent to 27,034.50 points.
Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 51 points or 0.60 per cent to 8,349.35 points.
"Markets corrected this week after three weeks of gains. The Nifty traded within a narrow range before finally breaking down on Friday on the back of a sharp sell-off," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.
"Market breadth was positive in three out of the five trading sessions of the week."
According to D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, caution prevailed in the global stock markets ahead of Trump's inauguration on Friday.
"Domestic stock markets traded lower due to profit booking and negative global clues," Aggarwal said.
"Moreover, weak earnings by some companies too weighed on the sentiments of the market participants."
Furthermore, the Indian rupee weakened by three paise to 68.19 against a US dollar from last week's close of 68.16 to a greenback.
"We saw a weaker gap for rupee on two key events this week -- UK Prime Minister Theresa May's speech on the evolvement of Brexit and due to the lead-up to Donald Trump's inauguration," Hiren Sharma, a senior independent currency analyst, told IANS.
In terms of investments, provisional figures from the stock exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 44.5 crore, whereas domestic institutional investors (DIIs) purchased stocks worth Rs 45.4 crore.
Figures from the National Securities Depository (NSDL) disclosed that FPIs were mainly net sellers in the stock market. They sold a total of equity and debt instruments worth Rs 1,579.61 crore, or $231.12 million from January 16-20.
The top Sensex gainers during the week under review were: Hindustan Unilever, (up 4 per cent at Rs 861.10), Asian Paints (up 3.53 per cent at Rs 965.80), ITC (up 2.38 per cent at Rs 255.45), Tata Steel (up 1.84 per cent at Rs 454.60) and Gail (up 1.70 per cent at Rs 459.85).
The losers were: Reliance Industries (down 5.91 per cent at Rs 1,025.70), Axis Bank (down 4.75 per cent at Rs 450.50), Coal India (down 3.51 per cent at Rs 303.75), Adani Ports (down 3.15 per cent at Rs 284.40), and Infosys (down 2.70 per cent at Rs 948.80).