Indian shares see second weekly gain

Indian shares ended higher for the second week in a row, but fell 0.44 percent on Friday as losses in Reliance Industries and Bharti Airtel and some profit-taking after six days of gains pulled down the main index. Shares in energy major Reliance fell 4.3 percent over worries of lower reserve estimates at its key gas block off India's east coast, and after television reports that a former upstream regulator's house was searched.
Top mobile operator Bharti fell 2.9 percent after brokerage CLSA downgraded the stock. Traders and analysts said despite the odd hiccup, the positive momentum from the week is likely to continue, helped by a revival in interest from foreign institutional investors (FIIs).
"There is some profit taking, but positive FII inflows again is a mood changer," said K.K. Mital, chief executive for portfolio management services at Globe Capital Market. Foreign institutional investors net bought shares worth $1.1 billion in the last five sessions till June 30, although they have been buyers for only around $320 million so far in 2011. They had pumped in a record $29.3 billion in 2010.
The 30-share BSE index closed down 0.44 percent, or 83.07 points, at 18,762.80 points, after having risen nearly 1 percent in early trade. Only 17 of its components ended higher. The market ended 2.9 percent higher for the week. It had gained 2.1 percent in the previous week. The BSE index is down 8.5 percent in 2011, making it one of the worst performing major markets in the world.
In the June quarter, the index fell 3.1 percent, its second straight quarterly decline after rising for the previous eight, as spiralling inflation and a slowdown in economic growth dispelled investors. Shares in Reliance Industries, which have the highest weightage in the index, fell after television reports that a former upstream regulator's house had been searched.
A report by a state auditor had earlier accused the regulator's office of approving inflated development costs for several exploration firms, newspaper reports have said. Earlier on Friday, Bank of America-Merrill Lynch cut its price objective for the stock by 7 percent due to lowering of reserve estimates for Reliance's KG D6 block, off India's east coast. The 50-share Nifty index slipped 0.36 percent to 5,627.20 points. In the broader market, 853 advances led 549 declines on volume of 631.9 million shares.