Markets seen down for week 2; SKS rebounds

MUMBAI : Indian shares were likely to fall for second straight week as they traded 0.9 percent lower on Friday, with mixed Asian peers weighing on sentiment.

Leading banks led the decline, while SKS Microfinance bounced back after a steep fall in the previous session.

Foreign portfolio investment in Indian equities has been subdued over last few sessions, displaying a cautious stance alongside global cues after jitters caused by Ireland's debt problems.

At 10:48 a.m. (0517 GMT), the 30-share BSE index was down 0.76 percent at 17,778.54 points, with 26 of its components declining. It is down nearly 2 percent for the week.

"The market was looking for a reason to crack after the steep rise we saw earlier this year. So, any negatives from the globe are hurting," said Ambareesh Baliga, vice-president of Karvy Stock Broking.

In the broader market, declining shares outpaced advancing ones in the ratio of 1.1 to 1, while 96 million shares changed hands on the BSE.

The 50-share Nifty was trading 0.97 percent lower at 5,940.60.

"The next support from here is 5,800-5,830 (for Nifty). If we break that, there could be a steep fall," Baliga added.

Foreign funds , which have invested a net of $28.5 billion in Indian shares so far in 2010, driving the benchmark BSE-30 index more than 13 percent higher.

Financials dropped as investors booked profits after the sharp gains so far this year. The banking sector index was down 1.4 percent, but was still up 37.5 percent in 2010.

Leading lenders State Bank of India , ICICI Bank and HDFC Bank 1 percent and 1.6 percent.

SKS Microfinance rebounded 10 percent after sliding as much as 20 percent in the previous session.

Kotak Securities has lowered its earnings forecasts for the firm for the next three financial years but upgraded its rating on the stock to buy, as the company has been beset by regulatory uncertainty.

The No. 2 mobile operator Reliance Communications and real estate firm Unitech , which has a telecoms joint venture with Norway's Telenor, extended losses and dropped 1.8 percent and 2.8 percent respectively.

The fiercely competitive mobile phone industry has been beset by a new wave of regulatory uncertainty stemming from a possible probe into 2G spectrum license allocations that a government audit says were awarded too cheaply.

Elsewhere, the MSCI's measure of Asian markets other than Japan was down 0.5 percent, while Japan's Nikkei edged 0.2 percent higher.

STOCK ON THE MOVE: Uflex rose 4.4 percent to Rs 253.75 after the plastic packaging goods maker said on late Thursday it expects a profit of Rs 800 crore on revenue of Rs 350 0 crore in FY11 on the back of rising demand for polyester films.