The NSE Nifty 50 index ended 0.24% lower at 11,642.4, while the S&P BSE Sensex closed 0.34% lower at 39,614.07, dragged by bank and financial stocks. They rose as much as 0.6% earlier in the session.
Both indexes posted their best monthly performance since July, but finished the week more than 2% lower on worries over the pace of global economic recovery as major European nations prepare for fresh lockdowns to combat surging coronavirus cases.
"If cases go up with the winter season coming, that will have ramifications in public demand," said Rusmik Oza, senior vice-president at Kotak Securities in Mumbai.
"The situation is quite grave."
The Nifty auto index fell 1.13%, led by declines in Hero Motocorp and Eicher Motors, which fell 3.3% and 2.4%, respectively.
The Nifty banking index shed 0.8%.
However, Reliance Industries gained as much as 1.9% ahead of its September-quarter earnings due later in the day, and kept losses in check.
Indian Oil Corp closed up 1.5% after the company reported a jump in quarterly profit, and Bharat Petroleum Corp gained 3.7% on upbeat earnings reported on Thursday.
The refiners boosted the Nifty energy index 1.74%.
Real estate developer Godrej Properties gained as much as 4.3%, helping the Nifty realty index rise 2.2%. Brokerage Jefferies in a note from Thursday said it maintained an optimistic outlook for the sector.
World stocks were down 0.3% at 0717 GMT, the European blue-chip index was down 0.6% and MSCI's broadest index of Asia-Pacific shares outside of Japan was last down 1.2%.
(Reporting by Derek Francis in Bengaluru; Editing by Ramakrishnan M.)