Indian shares slip, trim weekly gains as financials, oil pressures weigh

Indian shares fell on Friday, trimming weekly gains as heavyweight financials and higher oil prices weighed, while investors awaited key U.S. jobs data due later in the day.

The Nifty 50 dropped 0.27% to 24,570.65, while the BSE Sensex closed 0.58% lower at 78,499.17 on Friday.

The benchmark indexes rose 0.8% and 0.5%, respectively, in a busy week that included the Reserve Bank of India’s policy decision and volatility included by a new closing auction mechanism for stocks with derivatives contracts tied to them.

“This week was a mixed bag for markets. RBI’s decision to keep rates unchanged was in line with expectations, while crash in crude oil prices earlier in the week on Mideast peace prospects helped the sentiments,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securites.

Agrawal said the new closing auction session dominated trading this week, causing sharp swings at the close and reducing retail derivatives volumes.

Twelve of the 16 major sectors logged losses. The broader small-caps and mid-caps added 2.7% and 0.9%, respectively.

Investors stayed cautious ahead of U.S. monthly jobs data due later on Friday, which could shape expectations for future Federal Reserve rate moves.

U.S. interest rates matter for India and other emerging markets because they influence the dollar, Treasury yields and foreign fund flows.

Foreign investors have bought a net $1.3 billion of Indian shares so far in August, after purchasing $2.1 billion in July, according to National Securities Depository data.

India’s largest lender State Bank of India rose 1.1% on Friday after it reported a larger-than-expected quarterly profit, helped by healthy loan growth.

Bajaj Finance fell 5.8%, leading losses among non-bank lenders after a draft RBI proposal raised concerns over restrictions on certain revolving-credit products offered by them.