Indian shares ended higher for the third week in a row, but slipped more than 1 percent in choppy trade on Friday, dragged by losses in miners, Reliance Industries and financials and some profit booking. Coal India, the world's largest coal miner, plunged 8 percent, after a government source said a panel of ministers had approved a new bill calling for coal miners to share up to 26 percent of their profits with local communities.
Shares in steelmakers Jindal Steel & Power and Tata Steel fell 1.91 percent and 1.94 percent respectively on the draft bill, while metal makers Sterlite Industries and Hindalco shed more than 3 percent each. These firms operate captive coal mines. Iron ore exporter Sesa Goa tumbled 4.4 percent.
The proposed profit-sharing formula is a bid to smooth land acquisition. While industry bodies are reconciled to sharing some profits, they have baulked at 26 percent, saying that will sharply raise business costs and deter investors. "Prima facie, the costs may go up and the profits may come down, but it's a very prima facie opinion," said Jayesh Shroff, fund manager at SBI Mutual Fund.
The 30-share BSE Sensex shed 1.15 percent at 18,858.04 points, with 22 of its components declining. The index has lost 8 percent of its value year-to-date, but has gained 0.6 percent over the past one week. Foreign funds bought Indian shares worth $2.26 billion over 10 sessions to Wednesday, data from the market regulator showed.
Reliance Industries fell 1.8 percent after Morgan Stanley downgraded the energy giant's stock to "equal weight" from "overweight" and slashed its price target to 956 rupees from 1,206 rupees. ICICI Bank fell 2.7 percent, while top lender State Bank of India regained some lost ground to close 0.2 percent lower, after falling as much as 1 percent earlier. The 50-share NSE index was down 1.19 percent at 5,660.65 points. A total of 983 losers outpaced 437 gainers in a total volume of 649.8 million on the NSE.
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