Indian shares erased losses to end higher on Friday as forecast-beating earnings from State Bank of India and a drop in the inflation rate temporarily offset worries about foreign fund sales at home. The benchmark 30-share Mumbai index closed 0.32 percent higher at 6,499.5 points, after falling as much as 0.62 percent in intraday trade. "SBI's result helped the market pick up, but investors are still looking for clues from the global market, and events such as the monsoon for the coming weeks," said a trader at a local brokerage. SBI, India's largest commercial bank and a perceived proxy for the economy, reported a 22 percent rise in fourth-quarter profit, beating analysts forecasts for 15-percent growth.
SBI, with a 4 percent index weighting, rose 1.7 percent to 649.15 rupees, the third-biggest gainer among index stocks.
India's inflation rate came in lower than expected. The wholesale price-based inflation rate stood at 5.61 percent for the year to May 7, while analysts had expected 5.75 percent. Still, foreign fund sales at home and in other emerging markets remain a worry.
Foreign funds have sold a net $360 million worth of Indian shares since April 1. Traders said higher US interest rates were luring funds away from emerging markets.
Other gainers on Friday included engineering and construction company Larsen & Toubro Ltd, whose shares rose 3.1 percent on expectations of robust Q4 earnings, due out on May 27. But Dena Bank, which announced a net loss on Friday, fell 3.75 percent. The yield on the benchmark 10-year bond slipped to 6.9883 percent, ending below 7 percent for the first time since mid-April and dealers said further gains were possible.
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