Indian share prices are set to experience another week of volatile trade as investors and funds continue to be impacted upon by sentiment from uncertain global market trends, dealers said.
For the week to August 3, the Indian benchmark fell 96.17 points or 0.63 percent to 15,138.4 amid concerns overseas funds could exit emerging markets over US credit problems associated with sub-prime mortgages.
Earlier this week, the Reserve Bank of India hiked its cash reserve ratio (CRR) for banks by 50 basis points to seven percent in a bid to check excess liquidity, while keeping short-term borrowing rates unchanged.
The central bank said in a quarterly review that while inflation had fallen below its five percent forecast for the year to March 2008 from nearly seven percent earlier this year, commodity and asset price rises remained a concern.
"(In the context of) the hawkish tone on inflation and financial risks and the latest CRR hike, further tightening can not be ruled out," said Manika Prem Singh, economist at brokerage Edelweiss Securities.
India's inflation eased to 4.36 percent for the week ended July 21 from 4.41 percent for the previous week, official data on Friday showed, after the central bank held benchmark interest rates steady.