Indian shares closed the week lower, their first decline in 10 weeks, as they shed 0.3 percent on Friday, with Reliance Industries and outsourcers leading the decline. Energy giant Reliance Industries extended the slide and closed 0.6 percent lower at 1,083.30 rupees.
Macquarie said the revision of KG-D3, KG-D9 reserve estimates by Hardy Oil, Reliance's partner in the Krishna-Godavari natural gas field, has led to a conclusion that its risked prospetcive resource estimate has been cut by an aggregate of 11 percent in these blocks.
Macquarie estimates the impact on valuations would be 18 rupees per share.
The 30-share BSE index closed lower for the fourth straight session, shedding 0.27 percent or 48.08 points at 17,591.18 points, its lowest close in April. Twenty-two of its components closed in the red. "It (the market) is consolidating after the rally," said Nitin Rakesh, CEO of Motilal Oswal's asset management business adding that the market was waiting for earnings and credit policy to unfold next week.
Reliance Industries, outsourcers Tata Consultancy Services and Wipro, leading bike-maker Hero Honda and cement firms, Ambuja Cements and UltraTech will announce their March quarter earnings next week.
"Valuations are not very expensive, but they are not on the cheaper end any longer," said Rakesh. "Since good earnings are priced in, any positive surprise can really push the stock higher while a disappointment can pull the market down." The benchmark declined 1.9 percent this week, after rising 11 percent over nine consecutive weeks. It is still up 0.7 percent so far in 2010. Foreign funds have invested around $5.4 billion in Indian stocks so far this year, after pouring in $17.5 billion in 2009.
Software companies edged lower as traders booked profits after the recent rally. The country's No. 2 outsourcer Infosys Technologies closed 0.6 percent lower, after touching all-time highs in the previous session. It had risen nearly 6 percent in the last five sessions. Top outsourcer Tata Consultancy Services dropped 0.7 percent after climbing 3.5 percent in the three previous sessions.
Metals makers Sterlite Industries and Hindalco shed 1 percent each, pulled down by softer base metal prices. London copper continued to edge lower undermined by fears China's steps to cool the property market may slow construction investment and demand for metals.
Bank stocks were among the losers on rate hike fears. Top mortgage firm Housing Development Finance Corp shed 0.7 percent while leading lender State Bank dropped 0.4 percent. Top private lender ICICI Bank bucked the trend and closed 0.4 percent higher. India's central bank will release its annual monetary policy statement on April 20.
A Reuters survey showed most economists predict an increase in both the repo and reverse repo rates. Among those expecting a rise, roughly two-thirds predicted 25-basis point increases and one-third foresaw 50-basis point hikes. In the broader market, declining shares outnumbered advancing ones in the ratio of 1.4:1 in a volume of 378 million shares, lower than that on Thursday. The 50-share NSE index dropped 0.2 percent to 5,262.60 points.
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