Market breadth was negative with 777 stocks on the BSE enjoying gains and 1,171 struggling with losses. On the NSE, 620 stocks advanced while 1,018 declined.

Indiabulls Housing Finance shares plunged as much as 9.67 per cent, after credit ratings major Moody's downgraded the mortgage lender's corporate family rating to "Ba2" from "Ba1", and changed its outlook to negative from stable.

The Sensex lost as much as 337.12 points to touch 36,974.41 on the downside earlier on Friday, and the Nifty dropped to 10,924.30, down 105.1 points from the previous close.

The sectoral Nifty Auto index - comprising auto manufacturers and ancillaries - rose as much as 0.37 per cent, after plunging as much as 2.12 per cent earlier in the session. Hero MotoCorp, Maruti Suzuki, Mahindra & Mahindra and Eicher Motors rose 1.70 per cent, 0.91 per cent, 0.91 per cent and 0.88 per cent respectively.

Heavyweight Reliance Industries moved in the negative territory after four straight days of gains, falling as much as 1.17 per cent in intraday trade.

Analysts say that with the earnings season and key macroeconomic data now behind, some volatility can be expected in the near term in the absence of domestic cues.

Equities in other Asian markets fell and were headed for weekly losses as conflicting messages on the US-China trade war only added to worries for the global economy. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.17 per cent, to be down 1.4 per cent for the week. Japan's Nikkei fell 0.5 per cent, making a loss of 1.8 per cent on the week.

US President Donald Trump said on Thursday he believed China wanted to make a trade deal and that the dispute would be fairly short. Beijing vowed to counter the latest tariffs on $300 billion of Chinese goods but called on the US to meet it halfway on a potential trade deal.