Indian shares fell on Friday, with the NSE index hitting a one-week low, as investors booked profits in financials such as State Bank of India and auto makers such as Maruti Suzuki India Ltd.
Still, the indexes were headed for small weekly gains on hopes the central bank will cut interest rates after minutes from a monetary policy committee meeting earlier this month showed one member acknowledging that inflation had eased.
Caution is however likely to prevail in the near term as India gears up to unveil a nationwide goods and services tax on July 1, while monitoring global factors such as falling crude prices.
Markets will be closed on Monday for a public holiday.
"There will be some consolidation in the market once it has run up so sharply," said Shibani Kurian, senior vice president and head of equity research at Kotak Mutual Fund.
The broader NSE Nifty was down 0.4 percent at 9,588.60 as of 0600 GMT after hitting its lowest since June 16. The index was up marginally on week.
The benchmark BSE Sensex was 0.3 percent lower at 31,203.65, on track to post its third session of losses in four but was up 0.5 percent for the week. The index hit a record high on Thursday.
The Nifty PSU Bank index dropped as much as 1.2 percent. Shares of State Bank of India fell as much as 2.1 percent after gaining in the last five sessions.
The Nifty Auto index fell as much as 1.3 percent. Maruti Suzuki was down as much as 1.5 percent after gaining in the last two sessions, while Bajaj Auto Ltd shed 1 percent.
Shares of Electrosteel Steels Ltd slipped as much as 7.9 percent, while Bhushan Steel Ltd fell as much as 10 percent after the Mint economic daily reported that lenders have decided to start insolvency proceedings against the companies, along with Essar Steel. (http://bit.ly/2t165mY)
Fortis Healthcare Ltd slumped as much as 15 percent to 168.25 rupees, its lowest in more than six months, after Malaysia's Integrated Healthcare Holdings said it was not engaged in any negotiations in India currently.
(Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Biju Dwarakanath)