The key equity indices once again slipped into negative terrain in mid-morning trade. At 11:28 IST, the barometer index, the S&P BSE Sensex, was down 72.72 points or 0.20% at 35,856.92. The Nifty 50 index was down 22.55 points or 0.21% at 10,769. The Nifty slipped below the 10,800 mark after crossing that level in morning trade. Negative cues from other Asian markets spoiled investors sentiment.

The Supreme Court today reportedly dismissed pleas to probe India's multi-billion dollar Rafale fighter jet deal with France and said there won't be any probe into the pricing or the decision-making process. The SC bench, led by Chief Justice of India Ranjan Gogoi, said that the need of aircraft and quality of aircraft were not in doubt and detailed scrutiny is not required. The centre has defended the multi-billion deal for 36 Rafale fighter jets and opposed public disclosure of the pricing details. India had signed an agreement with France for the purchase of 36 Rafale fighter aircraft in a fly-away condition as part of the upgrading process of Indian Air Force equipment. The estimated cost of the deal is Rs 58,000 crore, media reports suggested.

Among secondary barometers, the BSE Mid-Cap index was up 0.23%. The BSE Small-Cap index was down 0.02%.

The market breadth, indicating the overall health of the market, once again turned negative. On BSE, 1043 shares rose and 1059 shares fell. A total of 126 shares were unchanged.

Shares of Anil Dhirubhai Ambani Group companies rose across the board. Reliance Naval and Engineering (up 14.17%), Reliance Infrastructure (up 4.86%), Reliance Power (up 1.96%), Reliance Capital (up 1.23%) and Reliance Communications (up 0.99%), edged higher.

Most pharmaceuticals shares declined. Aurobindo Pharma (down 2.87%), Divi's Laboratories (down 1.78%), Cadila Healthcare (down 0.86%), Lupin (down 0.76%), Dr Reddy's Laboratories (down 0.7%), IPCA Laboratories (down 0.69%), Glenmark Pharmaceuticals (down 0.54%), Strides Shasun (down 0.41%), GlaxoSmithKline Pharmaceuticals (down 0.39%) and Sun Pharmaceutical Industries (down 0.27%), edged lower. Cipla (up 0.01%), Alkem Laboratories (up 0.08%), Wockhardt (up 0.13%) and Piramal Enterprises (up 1.17%), edged higher.

On the political front, the Congress party has reportedly chosen senior leader Kamal Nath, 72, as its chief minister in Madhya Pradesh.

Overseas, Asian shares declined on Friday after China reported economic data that missed expectations. China on Friday reported industrial output and retail sales growth for the month of November. Industrial output in November grew 5.4% from a year ago. That figure was 5.9% in October. Retail sales rose 8.1%, down from 8.6% in October. Fixed asset investment rose 5.9% from January to November. It rose 5.7% from January to October.

In Japan, confidence among Japan's big firms remained unchanged from three months ago, a closely-watched central bank survey showed, but sentiment on the outlook soured for the first time in three quarters as trade frictions and global growth concerns hurt the business mood. The tankan's headline gauge of big manufacturers' sentiment stood at plus 19, unchanged from three months ago. The index for non-manufacturers rose to plus 24 from plus 22 in the September survey.

In Europe, the European Central Bank (ECB) on Thursday said it is bringing to an end a crisis-era bond-buying program this month. Bond purchases by the ECB will fall from 15 billion euros ($17.04 billion) a month to zero by the end of December, but the central bank plans to spend cash from maturing bonds to purchase additional debt. The ECB also left benchmark interest rates unchanged.

US stocks closed mostly lower after making small moves in and out of positive territory Thursday as investors continued to fret over the lack of clarity and progress in US-China trade talks.

On the data front, the Labor Department announced Thursday that initial jobless claims fell in the week ended December 8 by 27,000 to 206,000, easing fears that layoffs have been steadily rising. Further, the government also said that US import prices fell 1.6% in November, their largest decline in three years, led by the falling cost of oil.