BSE Sensex posts first weekly decline in four weeks

Indian shares posted their first weekly fall in four and shed 1.6 percent on Friday, dragged by Infosys Technologies which shed the most in nearly two years on disappointing results and outlook, marking a poor start to the earnings season. Sentiment was further weakened by a faster-than-expected pick up in March headline inflation, adding pressure on the central bank to take bolder monetary action.
Shares in Infosys fell 9.6 percent - its biggest fall since May 2009, after a lower-than-expected annual revenue forecast by the No 2 software services exporter citing slowdown in client spending sparked worries about the sector, sending the sector index down 6.4 percent. The company missed market expectations despite a 13.7 percent rise in quarterly profit, hurt by higher expenses in a seasonally weak quarter.
The 30-share BSE index dropped 1.57 percent or 310.04 points to 19,386.82, taking losses in the week to 0.3 percent. Twenty-three of its components lost ground. "The earnings season started on a very bad note. Also, inflation played a spoilsport," said Rakesh Rawal, head of private wealth management at brokerage Anand Rathi. The benchmark is up 8.8 percent since the start of March, as foreign funds pumped in $3 billion after being net sellers in January and February. For the year to date, the index is down 5.5 percent.
The 50-share NSE index erased 1.5 percent to 5,824.55 points. Declining shares beat advancing ones in the ratio of 1.7 to 1 on the NSE on a volume of 660 million shares, higher than its 90-day daily average volume of 619 million. Around 10.1 million Infosys shares traded on the NSE, more than 10 times its 90-day daily average volume.
"The reason behind Mohandas Pai's exit is unclear. It raises some questions there," Rawal said referring to the latest management shake-up within Infosys following the resignation of its human resources chief T.V. Mohandas Pai. Rivals Tata Consultancy Services and Wipro dropped 1.7 percent and 5.1 percent respectively, on views that their earnings could also fall short of expectations. Financials dragged lower, hurt by accelerating inflation.
Leading lenders State Bank of India, ICICI Bank shed 0.4 percent and 2.3 percent respectively, while and HDFC Bank bucked the trend and edged 0.1 percent higher. MSCI's all-county index was down 0.1 percent by 1019 GMT, while its emerging market sub-index dropped 0.2 percent.