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India's Nifty 50 and Sensex benchmarks were subdued on Friday, the last session of 2023, weighed down by a pullback in high-weightage financials, information technology (IT) and energy shares after their recent rally.

The blue-chip NSE Nifty 50 fell 0.21% to 21,733.25 points, while the S&P BSE Sensex shed 0.22% to 72,249.79, as of 9:53 a.m. IST.

The Nifty and BSE Sensex have risen about 20% each this year and are on course for their best month of 2023 with 8% gains.

Both the blue-chip indexes are set to post their second-best year in six.

"Domestic flows, retail interest and foreign institutional investor (FII) catch-up trade have aided the momentum in Indian markets in 2023," said Asit Bhandarkar, senior fund manager of equity at JM Financial Asset Management, adding the upcoming quarterly earnings season will be crucial for the upward momentum in markets to sustain.

Meanwhile, the small-caps and mid-caps have outperformed the benchmarks this year, having gained more than double of the Nifty and Sensex, despite valuation concerns.

"While the long-term India story will play out in small- and mid-cap space, the asset classes may be extremely volatile and exhibit significant drawdowns during periods of volatility," Bhandarkar added.

On the day, financials, IT, energy lost between 0.3% and 0.8%. The three indexes, which account for about 60% of the Nifty 50 weightage, have added between 13% and 30% in 2023.

Among individual stocks, Railtel Corporation of India jumped 5% on winning an order worth 1.20 billion rupees ($14.43 million) from South Central Railway.

Private lender RBL Bank climbed 4% after the Reserve Bank of India gave its approval to ICICI Prudential Asset Management Company and ICICI Prudential Life Insurance Company to buy an up to 9.95% stake.

($1 = 83.1540 Indian rupees)