Concerns that the Bharatiya Janata Party (BJP) might face defeat in the Delhi Assembly elections also weighed on investor sentiment.

The benchmark BSE Sensex ended 133 points, or 0.5 per cent lower to 28,717.91. The NSE Nifty closed 50.65 points, or 0.6 per cent lower at 8,661.05. The benchmark indices posted a second straight weekly loss, mainly dragged by weak corporate earnings and increase in bad loans at state-owned banks. The Sensex has come off 964 points from its all-time high of 29,681.77 touched on January 29.

The India VIX index, a gauge for market volatility, rose four per cent during the week to 20.68. Market players said investors turned cautious ahead of the Delhi polls scheduled for Saturday. Many fear if the BJP is defeated, it could trigger a correction in the market.

“Below-expected quarterly numbers were largely responsible for poor show this week. The PSU bank numbers raised concerns over their asset quality. Tata Motors’ results also failed to meet expectations,” said Dipen Shah, head- private client group research, Kotak Securities.

“Going ahead, markets will focus on the outcome of the Delhi Assembly elections, remaining quarterly numbers and the Budget. A growth-oriented Budget with structural reforms will lead to further re-rating of the markets. However, any disappointment in the Budget will be a negative for the markets.”

Shares of Tata Motors fell five per cent lower, most in four months, after its profits missed analysts’ expectations. Most state-owned banks, which posted their earnings earlier during the week, reported a jump in bad loans and lower profits.

The BSE Auto and Banking Index fell the most at 2.8 per cent and 1.3 per cent, respectively. Power stocks also saw a sell-off on Delhi elections worries. The Aam Aadmi Party (AAP), considered to be the front-runner, has promised cut in rates and to audits power companies.

“Poor third quarter results from a number of companies have impacted market and high-beta stocks. Investors have turned cautious towards banking, metal and automobile space,” said Vinod Nair, head-fundamental research, Geojit BNP Paribas Financial Services.

Most opinion polls peg Arvind Kejriwal-led AAP to win the Delhi elections. If the opinion polls turn out to be true the market could come under further selling pressure.

“We think the market is likely to see a correction of around 5 per cent over next two months on account of supply of paper, rich valuations and weak earnings. A loss in Delhi polls for the BJP could further provide an excuse for the correction,” said Bank of America Merrill Lynch had said in an investor note dated February 4.