Reliance Industries slumped after the Supreme Court sided with Amazon in the RIL-Future Group deal, underperforming the Sensex, which ended 215.12 points or 0.39 per cent lower at 54,277.72 on Friday. The Reserve Bank kept interest rates unchanged and maintained its accommodative stance.

The broader NSE Nifty fell 56.40 points or 0.35 per cent to 16,238.20.

Reliance Industries was the top laggard among the Sensex constituents, shedding 2.07 per cent, after the apex court on Friday ruled in favour of US-based e-commerce giant Amazon by holding that Singapore's Emergency Arbitrator (EA) award, restraining the Rs 24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail, was valid and enforceable under Indian laws.

UltraTech Cement, SBI, Tata Steel, HDFC, L&T and Axis Bank were among the other losers, slipping up to 1.70 per cent.

On the other hand, IndusInd Bank, Bharti Airtel, Tech Mahindra, Maruti, NTPC and Bajaj Auto were among the gainers, climbing as much as 3.11 per cent.

During the week, the Sensex rallied 1,690.88 points or 3.21 per cent, while the Nifty surged 475.15 points or 3.01 per cent.

The Reserve Bank of India (RBI) on Friday expectedly kept interest rates unchanged at a record low as it chose to support economic revival despite raising its forecast for inflation.

The six-member Monetary Policy Committee (MPC) voted unanimously to retain the main repurchase (repo) rate at 4 per cent, but was split on continuing with the lower-for-longer stance.

With the ebbing of the second Covid wave, RBI retained its GDP growth forecast for the current fiscal year ending in March 2022 at 9.5 per cent, but revised its retail inflation forecast to 5.7 per cent, up from the earlier 5.1 per cent.

It also announced variable rate reverse repo (VRRR) auctions worth Rs 2 lakh crore to soak up extra liquidity from banks.

Following a flat opening, the domestic market fell into the red as profit booking was witnessed in key sectors like banking after the announcement of the RBI monetary policy. Negative cues from Asian markets also added pressure on the domestic market.

"The policy was in line with market expectations, RBI continued to advance its super-easy monetary policy keeping its focus on economic recovery. On the side-line, the CPI forecast was increased to 5.7 per cent from 5.1 per cent for FY22. High global inflation has started to impact other emerging markets’ monetary policy and currencies, some have increased rates while others are planning to increase the rates in the future," said Vinod Nair, Head of Research at Geojit Financial Services.

Binod Modi, Head - Strategy at Reliance Securities, said domestic equities traded range-bound but the sharp correction in RIL dragged the market.

"RBI’s policy meeting outcome was broadly on expected line with a continued focus to support economic recovery through soft monetary policy," he added.

BSE energy, realty, basic materials, metal, consumer durables, and capital goods indices fell up to 1.45 per cent, while telecom, utilities, power, and teck closed with gains.

Broader BSE midcap and smallcap indices rose up to 0.28 per cent.

Asian markets were on the backfoot as a spurt in Delta variant cases in many countries spooked investors. Bourses in Shanghai, Hong Kong and Seoul were in the red, while Tokyo ended with gains.

Equities in Europe were trading on a positive note in mid-session deals.

Meanwhile, international oil benchmark Brent crude advanced 0.56 per cent to $71.69 per barrel.

The rupee inched 2 paise higher to close at 74.15 against the US currency, marking its fifth straight session of gains.

Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 719.88 crore, as per exchange data.