Indian shares closed down nearly 1% on Friday after Moody's Investors Service flagged domestic growth risks and cut its ratings outlook for the country, as well as some corporate companies and financial institutions.

The ratings agency lowered India's ratings outlook to "negative" from "stable" on Thursday, citing increasing risks that growth in Asia's third-largest economy will remain lower than in the past.

The firm also cut its ratings outlook for a clutch of companies to "negative", including HDFC Bank Ltd, State Bank of India, Indian Oil Corporation Ltd and Infosys Ltd.

The NSE Nifty 50 index closed down 0.86% at 11,908.15, while the benchmark BSE index finished 0.84% lower at 40,311.21.

For the week, the NSE index eked out a gain of 0.15%, while the BSE index rose 0.39%.

The realty index was the top gainer with a 1.66% rise, while the heavy-weight public sector index fell 2.16%.

Yes Bank closed up 3.76% and was the top gainer on the NSE index, while Bharti Infratel Ltd was the top loser, posting a 4.9% drop.