Indian shares lower

Indian shares posted their first weekly gain in three, but closed 1.6 percent lower on Friday, as world equities dipped on mounting worries that tough new austerity measures in southern Europe will dampen economic growth in the region. Financials led the decline with State Bank of India tumbling 4 percent as its quarterly net profit missed street view and fell 32 percent on a sharp rise in bad loan provisions.
Ambit Capital retained its "sell" rating on the stock and said its balance sheet continued to be a concern. The 30-share BSE index closed 1.57 percent or 271.27 points lower to finish at 16,994.60 points, but rose 1.3 percent for the week. Twenty-six of its components closed in the green. "The market is fairly priced at current levels. But, the European worries will continue to weigh on our markets now." said Rajen Shah, chief investment officer at Angel Broking.
The benchmark index is down 2.7 percent year to date, even as foreign funds have invested a net of nearly $6 billion in Indian equities so far this year. In 2009, foreign funds pumped in a record $17.5 billion, which saw the benchmark index gain 81 percent. Energy giant Reliance Industries, which has the highest weight on the Sensex, dropped 2.6 percent to 1,043.55 rupees.
Leading private lenders ICICI Bank and HDFC Bank declined 1.5 percent and 0.6 percent respectively. Mortgage lender Housing Development Finance Corp shed 1.1 percent. Non-ferrous metals producer Sterlite Industries and aluminium maker Hindalco dropped 3.8 percent and 3.3 percent respectively. Tata Steel, the world's eighth-largest steel maker, closed 4.7 percent lower.
Top mobile operator Bharti Airtel bucked the trend and climbed 2.2 percent as the telecom minister said India will listen to mobile phone operators' concerns before finalising plans to slap new fees on second-generation spectrum. The stock had fallen to its lowest close in three-and-a-half years on Thursday and had shed over 12 percent in the last three sessions, hurt by the new spectrum fee proposal. In the broader market, gainers outnumbered losers in a ratio of 2:4 on a relatively lower volume of 311 million shares. The 50-share NSE index dropped 1.7 percent to 5,093.50 points.