Indian shares fell more than 1 percent on Friday to their lowest close in nearly three-and-a-half months, dragged down by a 6 percent slump in Infosys after the software services exporter's January-March earnings fell short of expectations. The benchmark BSE index closed 1.07 percent lower at 27,437.94, falling 3.53 percent in the week. The broader NSE index ended 1.1 percent lower at 8,305.25, down 3.5 percent in the week.
Both the indexes closed at their lowest since January 14 and posted their second consecutive weekly fall. Infosys shares slumped 5.98 percent. Markets across the region also edged down, while sentiment remained cautious ahead of the expiry of the monthly derivatives contracts due next week. Overseas investors sold Indian shares worth 2.76 billion rupees ($43.60 million) on Thursday, provisional exchange data showed, after they offloaded a net 9.1 billion rupees in the previous session.
India's central bank is likely to cut interest rates again next month, with analysts polled by Reuters forecasting a strong probability that will act ahead of scheduled policy meetings, as it has done so far this year. "Delay in land acquisition is a serious matter. Corporate earnings will take a big hit, at least in the near future. This may affect EPS growth," said Deven Choksey, managing director at KR Choksey Securities.
"Subdued EPS outlook is resulting in withdrawal of funds, at least by FII traders." Both the indexes were heading towards their lowest close in a month. Blue chips fell.
Larsen & Toubro was down 1.9 percent after a 1.3 percent fall in the previous session, while Housing Development and Finance Corp declined 2.3 percent. Crompton Greaves fell 2.5 percent after the company announced the sale of its consumer electricals unit to a consortium led by US private-equity fund Advent International. Mahindra & Mahindra Financial Services gained as much as 3.9 percent after the company's gross bad loans declined to 5.9 percent of total advances in January-March compared with 7.1 percent in October-December.