MUMBAI (Reuters) – The Nifty fell on Friday, heading towards its biggest weekly loss in eight, as blue-chips such as Tata Motors (TAMO.NS) slumped on weak earnings and on worries the Bharatiya Janata Party may face defeat in Delhi elections.

Rising bad loans at state-run banks and faltering volume growth at consumer goods companies in the October-December quarter have dashed hopes of investors awaiting earning upgrades after shares hit a string of record highs recently.

Traders worry that elections in the national capital, due on Saturday, may show loss of popularity for the ruling BJP and become a drag on the awaited reforms, while Arvind Kejriwal-led Aam Aadmi Party (AAP) may go for populist measures, if it comes to power.

“Market is discounting a higher probability of AAP coming to Delhi but it will just be a short-term sentiment dampener,” said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm based in Mumbai.

Delhi cannot alter BJP’s tally in the upper house of parliament which the government is now focusing on to get a majority, he added.

The broader NSE Nifty Futures was down 0.37 percent, dropping 1.5 percent for the week and heading towards its biggest weekly loss since Dec. 12, 2014.

The Sensex was lower 0.24 percent, trading 1.4 percent lower for the week.

Caution also prevails ahead of the GDP and inflation data due next week after the central bank held interest rates steady on Tuesday, leaving its next move probably until after the government’s annual budget on Feb. 28.

Blue-chip stocks led losses. Tata Motors lost as much as 6.3 percent, heading towards its biggest daily fall since May 2012.

Larsen & Toubro (LART.NS) fell 0.7 percent on caution ahead of its quarterly results on Monday.

(Reporting by Abhishek Vishnoi; Editing by Subhranshu Sahu)