Indian shares dropped on Friday, as profit booking emerged after the Nifty 50 scaled a record high, trimming weekly gains for the blue-chip indexes.

The blue-chip Nifty 50 fell 0.8 per cent and S&P BSE Sensex dropped 1 per cent on the day, dragged by information technology stocks. The Nifty 50 rose about 0.6 per cent to a peak earlier in the session.

The benchmarks added about 0.25 per cent each this week, their second consecutive weekly rise.

"Markets are finding it difficult to rise significantly despite mostly positive quarterly results, as they have run up over the last six months on hopes of a return of ruling BJP (Bharatiya Janata Party) to power after national elections," Avinash Gorakshakar, head of research at Profitmart Securities said.

The profit booking and elevated volatility will continue until the results of India's general election and any gains will be incremental, Gorakshakar said.

India's national elections are underway, with two of the seven phases completed. The results will be announced on June 4.

Indian markets underperformed other Asian peers on the day.

The Nifty volatility index rose to a two-month high at close.

High weightage financials gained more than 2 per cent, led by non-bank lender Bajaj Finance, which jumped 3 per cent after the central bank lifted a five-month ban on some of its lending products.

Also read: Rupee rises 3 paise to end at 83.43 against US dollar

IT stocks dropped 2.25 per cent, dragged by an 8.5 per cent decline in HCLTechnologies after the software services company missed March quarter revenue estimates, making it this week's top loser on the Nifty 50 index.

Expectations of higher-for-longer US interest rates have been weighing on India's IT sector, as elevated rates have resulted in lower client spending the US, a key market.

Auto stocks gained about 2 per cent, supported by strong monthly sales from Mahindra & Mahindra and Bajaj Auto.

Mahindra & Mahindra rose about 7 per cent and was the top percentage gainer on the Nifty 50.