A global equities sell-off, and domestic political uncertainty hurt investor confidence, triggering a decline in Indian equities during the week ended November 23.
Also, investors were left disappointed over the lack of any extraordinary liquidity-inducing measures by the Reserve Bank of India's board.
The only concession that central bank gave on November 19 was by way of extending by a year the timeline for the full implementation of Basel 3 guidelines.
Further, profit booking and outflow of foreign funds halted the three week-long gaining streak of the key equity indices -- S&P BSE Sensex and NSE Nifty50 -- during the truncated trading period.
Accordingly, the market breadth was negative in three out of the four trading sessions during the week.
India's financial markets were shut on Friday on account of Guru Nanak Jayanti.
However, a continuous decline in global crude oil prices and subsequent appreciation in the Indian rupee arrested the steep fall.
During the week, the Sensex lost 476 points, or 1.34 per cent, to close at 34,981.02 and the 50-share Nifty gave up 155.45 points, or 1.45 per cent, to settle at 10,526.75.
"The market ended this week on weak a note despite a decline in oil prices, and strengthening of the rupee," said Vinod Nair, Head Of Research at Geojit Financial Services.
The week gone by saw the declining trend in the Brent crude oil price. This helped the equities avert a steeper fall during the week.
The Brent crude last traded at $58.80 per barrel.
After touching an $86-a-barrel mark in early October, the Brent crude oil has slipped below $59 following US decision to exempt eight countries, including India and China, to continue buying oil for six months from Iran despite sanctions.
The decline in crude oil prices, which have crashed over 30 per cent since early October, comes amid expectations of slowing demand and rising US inventories.
The rupee closed over 5 per cent higher at 70.67 per dollar on Thursday from its lifetime low of 74.47, which it hit in early October. It gained Rs 1.24 from its previous week's close of Rs 71.92.
A broad sell-off in the US markets reverberated through Europe and Asia, as global growth is seen buffeted by trade tensions between the United States and China.
D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, said: "Domestic market traded weak in tandem with global markets. Sentiment also took a hit after India's crude oil imports in October rose to its highest level in at least more than seven years."
"In its first meeting after the rift between the central bank and the government became public, the RBI has said that its board would support small businesses and has extended the timeline for banks to set aside an additional 0.625 per cent as capital conservation buffer by one year to March 31, 2020 to help them to lend more."
Nevertheless, global credit ratings agency Moody's Investors Service termed the RBI board's decision to extend the timeline for the full implementation of Basel 3 guidelines by a year as a credit-negative for state-run banks.
Besides, uncertainty due to the ongoing state elections was another reason for the decline.
Elections to constitute assemblies in Chhattisgarh, Madhya Pradesh, Rajasthan, Telangana and Mizoram are scheduled for this month and the next.
A win for the Bharatiya Janata Party, which rules Chhattisgarh, Madhya Pradesh, and Rajasthan would bolster Prime Minister Narendra Modi's chances of re-election next year.
The provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 856.61 crore in the week ended November 23. The domestic institutional investors bought Rs 302.09 crore worth of stocks in the past week.
On an yearly basis, the outflow according to the National Securities Depository Limited has touched Rs 42,148 crore in the equity segment.
"Markets witnessed profit booking this week after three weeks of gains. The Nifty ended with a week-on-week loss of 1.46 per cent," Deepak Jasani, Retail Research Head, HDFC Securities, said.
"The top sectoral gainers were the Reality and FMCG indices. The top sectoral losers were the infrastructure, IT, metals and finance indices." said Jasani.
The top weekly Sensex gainers were Bharti Airtel, up 7.95 per cent at Rs 327.95; Adani Ports, up 6.33 per cent at Rs 367.15; ITC, up 2.19 per cent at Rs 280.45; Sun Pharma, up 2.11 per cent at Rs 525.80; and Tata Motors, up 1.28 per cent at Rs 182.25 per share.The major losers were Tata Steel, down 8.27 per cent at Rs 539.95; Wipro, down 5.09 per cent at Rs 307.45; Yes Bank, down 5.07 per cent at Rs 195.55; NTPC, down 5.07 per cent at Rs 146.10; and ICICI Bank, down 4.78 per cent at Rs 351.95 per share.