Indian share prices closed 1.66 percent lower Friday on concerns of higher inflation led by crude oil prices and an escalation of tension in the Middle-East, dealers said. They said higher oil costs could put more pressure on prices overall, with sentiment dampened by an expected rise in interest rates by month-end, which would impact corporate profits.
India's financial capital was also still recovering from deadly blasts on commuter trains Tuesday, which killed 179 people and injured hundreds. The benchmark 30-share Mumbai stock exchange index finished down 180.28 points at 10,678.22.
"The markets appear to be nervous ahead of an expected short-term interest rate hike. Inflationary pressure will remain and we expect the markets to remain rangebound till then, considering the sharp run-up of nearly 18 percent in (the past) four weeks," said Naresh Garg, chief investment officer of Sahara Mutual Fund.