The BSE Sensex falls 0.17 percent, while the Nifty is down 0.26 percent. IT shares fall as investors book profit in the penultimate trading session of the year: Infosys (INFY.NS) is down 1.3 percent, while Wipro (WIPR.NS) falls 0.86 percent.
Software exporters have rallied this year, helped by a weak rupee and a recovery in the U.S. market.
Foreign institutional investors were buyers of 3 billion rupees in Indian shares on Friday, exchange data showed. FIIs have bought $20 billion in Indian equities this year, according to regulatory data.
Indian shares are set to post their second consecutive annual gain this year, aided by steady foreign investor interest in Asia's third-largest economy.