Indian shares ended 0.47 percent lower on Friday, after gaining for two consecutive sessions, on mounting worries over economic growth, with stocks expected to stay under selling pressure next week as well. Telecom carriers Bharti Airtel and Idea Cellular fell more than 1.4 and 3.5 percent, respectively, after the telecoms ministry said they would not be allowed to offer 3G services outside their licensed zones through roaming agreements with each other.
The main 30-share BSE index closed down 74.66 points at 15,738.70, with 19 of its components in the red. It, however, gained 1.6 percent for the week - its first rise in three weeks. The 50-share NSE index ended down 0.42 percent at 4,714 points. In the broader market, there were 1.3 gainers for every loser on volume of about 523 million shares.
"Foreign institutional investors have been selling everyday in our market. It's just that the global market have been largely positive and have been supporting our markets," said Neeraj Dewan, director at Quantum Securities. Foreign funds have been net sellers for nine straight sessions to Wednesday, data from India's capital markets regulator showed. They have been net sellers of local stocks worth more than $500 million so far in 2011, a far cry from record net inflows of more than $29 billion in 2010.
"There are really no domestic positive cues likely to come," Dewan said. "Everyone is looking towards RBI (Reserve Bank of India) to take some action, I don't think they should wait till the next policy to take action". The BSE index is most likely to stay in a 15,000 to 17,000 range for the next six months, said Nirmal Jain, chairman of India Infoline group.
The ballooning fiscal deficit is a big concern and markets can recover if reforms get a push after state elections next year and if the central bank eases rates at its policy review in January, Jain said. Brokerage CLSA cut its forecast for Indian economic growth to 6.7 percent for the current fiscal year from its earlier projection of 7.3 percent, as high interest rates take a toll, with policy inertia and corruption scandals hurting confidence.
Top lender State Bank of India and No 2 lender ICICI Bank fell 1.3 percent and 0.7 percent on profit taking. They had rallied 2.9 percent and 3.7 percent on Thursday. Pantaloon Retail, the country's largest listed retailer, rose as much as 4 percent after the finance minister said a plan to give foreign supermarkets access to its retail industry is still a government priority and has not been shelved.