India's BSE Sensex pared early losses to close about 0.2% down at 74,872 on Friday, hovering at three-month lows and reversing modest gains in the prior session. Market sentiment remained weighed down by elevated crude oil prices, inflation worries, fierce geopolitical tensions and sustained foreing outflows. Meanwhile, investors were cautious ahead of the release of a key US inflation report, which will be critical for the Fed's decision next week and potentially affect capital flows into domestic equities. Several sectors declined, led by metals and financials, although gains in technology stocks provided some cushion.