Mumbai: Indian shares rose for the second week but were down 0.8% on Friday, in line with global equities which tumbled after the US Federal Reserve unexpectedly lifted an emergency lending rate.
Energy major Reliance Industries, which has the highest weight on the main index, contributed the most to its losses and declined 1.3% to Rs984.25.
The economictimes.com website reported the company may raise its offer for LyondellBasell that will include cash and stock options for shareholders and creditors.
The 30-share BSE Index closed 0.83% or 136.21 points lower at 16,191.63, taking the week’s gain to 0.2%.
Twenty-six of its components lost ground.
“Clearly, our market today was hurt by the weakness in global markets, after Fed hiked the discount rate,” said Rajen Shah, chief investment officer of Angel Broking.
Shah expects the main index to hover in the 15,500-16,500 range in the near term.
“At the Budget, the government will take care not to hurt investor sentiment as they are coming up with FPOs (follow-on public offers) themselves,” Shah said.
India unveils its Budget for the 2010-11 financial year (April-March) on 26 February.
Shah said he expected the government to balance any stimulus withdrawal measures with positive moves to offset the damage.
Non-ferrous metals producer Sterlite Industries dropped nearly 3%, as London Metal Exchange copper declined as it was pressured by a firmer dollar and an unexpected hike in the US Federal Reserve discount rate.
Tata Steel, the world’s eighth-largest steel maker, dropped 2.6%, while aluminium producer Hindalco lost 1.6%.
It was a mixed bag for financials. Top lender State Bank of India shed 1.8%, while private lender HDFC Bank climbed 0.9%.
Top private lender ICICI Bank dropped 1.1%, while mortgage lender Housing Development Finance Corp rose 0.5%.
Shares of top mobile operator Bharti Airtel resumed their fall and shed 1% after two days of mild gains, with a $9-billion potential deal for Kuwaiti telecom Zain’s African assets weighing on the stock.
Rating agency Standard & Poor’s put Bharti on “creditwatch with negative implications”, citing possible significant deterioration in Bharti’s cashflow protection measures and weakening of its business risk profile after it enters Africa.
The stock has shed more than 11% this week, its biggest weekly loss since end-October.
In the broader market, fallers were more than twice the number of gainers in a volume of 299 million shares, lower than last week’s daily average of 351 million shares.
Global stocks were weak with Asian markets other than Japan dropping 1.6%, while the pan-European FTSEurofirst 300 index was down 0.5% by 1026 GMT.
The 50-share NSE index declined 0.9% to 4,844.90.