Indian shares were flat amid subdued volumes on Friday, but the key indexes were headed for their biggest weekly drop in five as emerging markets remain under pressure due to foreign investor outflows. Donald Trump's victory in the US presidential election held last month has sparked outflows from emerging markets, with foreign institutional investors selling a net $413.55 million in Indian shares this month as of December 21.
"Lack of buying has been a major factor in the market's performances of late," said Deven Choksey, managing director at KR Choksey Securities. "We'll probably see a short change before the derivatives expiry next week but nothing substantial until the impact of demonetisation (India's action to ban higher-value banknotes) is clearer and the annual budget is announced."
Indian Prime Minister Narendra Modi scrapped 500-rupee and 1,000-rupee banknotes on November 8 in a bid to flush out cash earned through illegal activities, or earned legally but never disclosed to the taxman. The NSE index was up 0.01 percent at 7,987.55 as of 0704 GMT, but was down 1.95 percent for the week, on track for its biggest weekly fall since the week ended November 18. The broader NSE index has fallen in each of the previous seven trading sessions, marking its longest losing streak in 1-1/2 years, falling as well over lingering fears on the impact of scrapping higher-value banknotes.