The Sensex opened on a soft note after Reliance Industries second quarter results missed street estimates and touched a low of 16,669 mid week. A slew of negative earnings and high weekly inflation also weighed on the markets. The Sensex was unable to sustain the mid-week gains and succumbed to selling pressure on Friday ahead of the Euro-zone summit over the weekend.

The Sensex finally closed at 16,786, down 151 points and the Nifty closed at 5,050, down 42 points on Friday. For the week both the indices were down 2%, posting their worst weekly loss in a month.

Across the globe, Asian markets ended the week on a subdued note due to concerns of growth slowdown in China after second quarter GDP cooled to 9.1%, slowest in two years. The Hang Seng and the Nikkie Stock Average ended flat, while the Shanghai Composite slipped 0.6% on Friday.

On the other hand, the US markets rallied on Friday. The Dow Jones and S&P 500 surged almost 2% on each over optimism ahead of the European Summit and upbeat corporate earnings from McDonald's.

Back in India, going forward, the markets will take cues from the outcome of the Euro-zone summit, monetary policy and derivatives expiry next week.

Sahaj Agrawal, Associate Vice President-Derivatives from Kotak Securities said, "We expect October series to end around 5,000 levels on Tuesday. Nifty is expected to trade in the range of 4,900-5,000 on Muhurat trading day. Agrawal added, "Trade above 5,170 will confirm the uptrend in the index. We remain selectively positive and advise accumulation for the medium term.”

In Europe, on Friday night, Greece was given 6.95 billion euros package in aid which raised expectations of a positive outcome out of the European Union Summit in Brussels. Germany's chancellor Angela Merkel said the dead lock between Germany and France was due to "technical details" and not a disagreement, increasing hopes of solution to the debt crisis.

Back in India, on the macro-front, food inflation surged to 10.6 percent for the week ended October 8 from a year earlier, the fastest rate since April stoking expectations of another 25 bps hike.

BSE capital goods index shed 4.3% to 10,558 in the week, followed by IT, realty and oil & gas indices. Meanwhile, the BSE bankex remained in green with marginal gains at 11,094.

Poor quarterly results by IT majors TCS and HCL Tech took the index down 3% this week to 5,525. TCS dropped 7.6% to Rs 1,048 after reporting 4.7% quarter-on-quarter (q-o-q) drop in net profit at Rs 2,301 crore in the second quarter ended September 30, compared to Rs 2,415 crore at the end of the first quarter ended June. In the year-ago period, it had earned Rs 2,169 crore.

HCL Tech posted a 2.7% dip in net profit at Rs 496.7 crore for the first quarter ended September 30, 2011. In the previous quarter it was Rs 510.5 crore.

Among other companies which came out with quarterly numbers, Larsen & Toubro reported a 15% jump in profit after tax at Rs Rs 798 crore on 20% growth in gross revenue at Rs 11375 crore in Q2 September 2011 over Q2 September 2010. The company slipped 5% to Rs 1,336 as it cut its order growth guidance for the current fiscal year to 5%, from 15% earlier.

HDFC fell 4.8% to Rs 634 after the National Housing Bank banned the levy of pre-payment penalty on floating rate home loan.

DLF slipped 3% to Rs 225 after Securities and Exchange Board of India decided to investigate allegations against the real estate developer on whether it failed to disclose a police complaint against an associate firm in its share sale document in 2007.

Maruti Suzuki rose 6% to Rs 1,092 after the long standoff between workers and management at its Manesar plant came to an end early on Friday. Among other auto stocks, Hero Motocorp gained 3% to Rs 2,052 after announcing a 19% jump in net profit at Rs 603.62 cr.

Among banking names, State Bank of India, went up by 3.5% to Rs 1,948 on hopes of capital infusion from the Government of India, its majority shareholder. HDFC Bank added 2.5% to Rs 486 on a 31% rise in net profit at Rs 1,199.35 crore.

State run, Coal India gained 2% to Rs 328 after the workers called off a three-day strike as the firm hiked bonus payment for employees