The reduction in the CRR by the Reserve Bank of India failed to move the markets materially as investors had already discounted the development.
Prominent banking stocks which rose immediately after the announcement closed in the red as market participants booked profits.
Within the Sensex pack, while IndusInd Bank ended lower by 0.73 per cent, HDFC Bank and ICICI Bank lost 0.39 per cent each.
Similarly shares of SBI fell 0.10 per cent and Kotak Mahindra Bank by 0.03 per cent.
Reflecting this trend, the Bank Nifty ended 0.18 per cent lower at 53509.50 after rising 0.49 per cent to 53868.50.
Snapping a five-day winning run, benchmark Sensex dropped by 56 points in a highly volatile trade on Friday to settle at 81709.12. Intra-day, it swung 419.72 points, hitting a high of 81925.91 and a low of 81,506.19. In the past five trading days, the Sensex jumped 2722.12 points or 3.44 per cent.
The NSE Nifty dipped 30.60 points or 0.12 per cent to settle at 24677.80.