Indian shares slipped on Friday, weighed down by telecom and banking stocks after the Supreme Court rejected pleas from mobile operators for relief on dues owed to the government.

The Supreme Court dismissed petitions by wireless carriers, including Bharti Airtel and Vodafone Idea, seeking a review of its order late last year that they must pay the bulk of nearly $13 billion in dues to the government.

The decision has affected market sentiment, with banks likely to be impacted, said Neeraj Dewan, director at Quantum Securities, adding that weak sentiment may also have some negative impact on foreign direct investment.

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A view of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).IANS

The NSE Nifty 50 index was down 0.19 percent to 12,332 by 0406 GMT, while the benchmark S&P BSE Sensex slipped 0.16 percent to 41,866.16.

Vodafone Idea Ltd, whose survival could be threatened after the court's decision, fell a record 40 percent to a two-month low.

Conglomerate Grasim Industries Ltd, a shareholder of Vodafone Idea, dropped 6 percent.

Telecom tower company Bharti Infratel Ltd slumped 13.5 percent in its sharpest intraday drop in nearly three years and was the biggest loser on the Nifty.

Yes Bank Ltd slipped 7.4 percent after Moody's placed the lender's ratings under review, citing delays in raising new capital.

The private-sector lender, along with State Bank of India and IndusInd Bank Ltd, have high exposure to Vodafone Idea, reports said, citing UBS Group AG.

telecom sector
A rickshaw puller speaks on his mobile phone as he waits for customers in front of advertisement billboards belonging to telecom companies.

SBI dropped 4.1 percent, while IndusInd Bank slid 5 percent.

However, Bharti Airtel Ltd, which must pay roughly $3 billion under the ruling, rose 5.2 percent to an over two-year high. Credit Suisse said the company could benefit from likely further consolidation in the telecom sector, and raised its target price by 9 percent.

Meanwhile, conglomerate Reliance Industries Ltd, which owns telecom upstart Reliance Jio, rose 2 percent, while top IT company Tata Consultancy Services Ltd rose 0.7 percent ahead of its quarterly results.

Broader Asian peers were firm after global stock indexes and Wall Street posted more records, and as China's economic growth matched expectations in spite of US trade pressures.