A dent in the confidence of investors across the globe on the euro-zone debt crisis led the benchmark Sensex to snap its last week's strong gains and close down by over 242 points at 17,562.61 during the week under review.
Steep rise in food inflation and hike in petrol prices at home also weighed on the market sentiment.
The BSE benchmark Sensex dropped by 242.19 points or 1.36 per cent to end the week at 17,562.61 from its last weekend's close after moving in a range of 17,813.11 and 17,278.03.
The NSE 50-share Nifty also fell by 76.50 points or 1.43 per cent to finish the week at 5,284.20.
The market was in utter confusion till the middle of the week over the developments abroad, mainly in Europe, after Greek Prime Minister called a referendum over the European Union bail-out deal.
However, scrapping of the idea of referendum by Greek PM on Thursday after the opposition indicated they backed the new bailout deal to cut Greece's debts and surprise interest rate cut by the European Central Bank (ECB) gave some relief to investors and helped the recovery in the last two days.
Looking at the current unpredictable scenario and last week's solid gains, investors preferred to book profits mainly in Auto, Metal, refinery and IT stocks.
However, some of the FMCG and power counters attracted good buying support.
Sensex-based stocks like Tata Motors, M&M, Hero MotoCorp, RIL, ONGC, ICICI Bank, ITC, TCS, Infosys Tech, L&T, Sterlite Ind, Hindalco, Tata Steel and Coal India suffered sharp to moderate losses, affecting the sentiment. .
However, FMCG major Hind Unilever attracted heavy buying as the company on Monday announced excellent Q2 earnings, which boosted investor confidence. It was the top gainer from the sensex pack with a rise of 8.41 per cent, cushioning the fall in Sensex to some extent.
The company registered nearly 22 per cent rise in the net profit for second quarter of the current fiscal. It announced an interim dividend of Rs 3.50 per equity share of face value of Re 1 each for current fiscal.
BHEL, SBI, Bharti Airtel, Tata Power and NTPC also closed the week with marginal gains.
On the global front, markets were under pressure in the first half of the week also due to troubled securities firm MF Global Holdings which on Monday filed for bankruptcy protection, making it the first major American entity to be shattered by the European debt turmoil.
The group has presence in India through various entities including MF Global - Sify Securities India Pvt Ltd and MF Global Commodities (I) Pvt Ltd, according to its website.
Brokers said softer-than-expected purchasing managers index (PMI) data for China's manufacturers further dampened the sentiment.
Asian markets, excepting China, settled in the week in the red. European stocks too ended bearish. On Wall Street, the Dow Jones Industrial Average and the Nasdaq Composite Index broke string of weekly gains and closed weak.
Back home, brokers also attributed some weakness to steep rise in food inflation to nine-month high of 12.21 per cent for the week ended Oct 22 from 11.43 per cent in last week.
Finance Minister Pranab Mukherjee expressed grave concern over rising food inflation, attributing the latest spike in prices to increased demand during the festive season.