Indian shares slip two percent

Indian shares closed at their lowest level in nearly 14 months on Friday, falling 2.2 percent, following fresh worries of a global economic downturn that sparked a slide in markets globally. The main stock index fell 4.9 percent for the week, its biggest weekly decline since the week of October 26, 2010, and its second consecutive weekly loss.
"We were largely drifting along with what is happening in the US and European markets. If there is no big negative news coming out from Western markets, we could see a recovery," said Rikesh Parikh, Vice President, equities at Mumbai's Motilal Oswal Securities.
The 30-share BSE index ended at its lowest closing level since June 2010 at 17,120.39 points, down 2.2 percent - its biggest single-day fall since early May. It had fallen to a near 14-month low of 16,990.91 at one stage. Only three of its components ended in positive territory.
Shares in frontline financial and technology firms suffered the most, prompted by worries over growth outlook and fears of a selloff by foreign investors. Top-listed firm Reliance Industries, a favourite with foreign funds, slid to its lowest close since April 1, 2009. India's main stock index has declined 15.6 percent so far in 2011, making it one of the worst performing markets globally.
Foreign funds' interest has wavered since the second half of July, paring net inflows over the past five weeks to $2.8 billion. So far in August, they have been net sellers of $304 million in equities. Tata Consultancy Services fell 3.5 percent, while smaller rivals Infosys and Wipro lost 4.4 percent and 2.2 percent, respectively.
Financial stocks, already under pressure after last week's larger-than-expected 50 basis points increase in key rates by India's central bank, slipped further as investors fretted over growth prospects and cut positions in the sector. The 50-share NSE index fell 2.3 percent to 5,211.25 points. In the broader market, 1,271 declines far outnumbered the 191 advances, on heavy volume of about 805.2 million shares.