The Sensex traded 60 points or 0.31 per cent lower at 19,437 while the Nifty declined 23 points to 5,874 as of 10 a.m. The rupee traded flat against the dollar at 53.91.
"Earnings over the last week have not been up to the mark... The Nifty may fall to 5,840, but fresh buying may support markets at lower levels," market analyst Ambareesh Baliga said.
Markets have weakened considerably after rising to a two-year high at the beginning of 2013. Sustained weakness in the economy, as reflected in the poor macro-economic data such as factory output, has weighed on sentiments.
Third quarter earnings season, which begun well with Infosys and Reliance Industries beating estimates, is ending on a weak note after Tata Motors, SBI and DLF disappointed.
34 stocks traded lower on the Nifty led by realty major DLF. The stock fell nearly 3 per cent on weak Q3. (Read: Brokerages bullish on DLF despite weak Q3)
IT major Wipro extended fall after exclusion from the Nifty benchmark. Tata Motors fell 1.6 per cent on weak earnings. (Read full story)
However, State Bank of India, the country's largest lender, traded in the green. SBI had reported a 4 per cent rise in net profit, its lowest in last one year. Asset quality deteriorated, weighing on sentiments.
State-run refiner BPCL was the top Nifty gainer, up 1.5 per cent, followed by Tata Power and Gail India.
Shares in Suzlon Energy plunged on Friday after the turbine maker said its consolidated loss widened to Rs 1,154.53 crore in the October-December quarter on account of a sharp fall in revenues. Suzlon is the world's fifth-largest wind turbine maker. (Read: Suzlon shares plunge on weak Q3)