Sensex falls for second day SBI, ONGC dip

The Sensex fell on Friday, posting its biggest weekly fall in four weeks, led by falls in State Bank of India (SBI), after the country's biggest lender posted its smallest profit increase this year as bad loans constrained earnings growth.

Falls also tracked lower global share markets which were on course for their worst weekly performance since June on Friday, as concerns over the United States fiscal cliff and the outlook for Europe hit sentiment.

The Sensex fell 0.86 per cent, or 162.58 points to end at 18,683.68 points, marking its second day of declines. For the week, the index closed down 0.4 per cent, to post its biggest fall since the week ended October 14. The 50-share Nifty fell 0.91 per cent or 52.50 points to 5,686.25 points, falling 0.2 per cent in the week, closing below the psychologically important level of 5,700.

Trading volumes are likely to remain low next week as the stock market will be closed on Tuesday and Wednesday for Diwali holidays, but a special trading session will be held on Tuesday.

State Bank of India fell 3.9 per cent, marking its biggest single-day fall since October 30, as its September quarter asset quality disappointed investors.

The state-owned bank, which has exposure to debt-laden firms such as Kingfisher Airlines Ltd, Air India Ltd and Deccan Chronicle Holdings Ltd, said bad loans rose to 5.15 per cent of its loan book as of the end of September from 4.19 per cent a year earlier.

Among other key earnings, Tata Steel fell 3.32 per cent after reporting a surprise quarterly loss of Rs 364 crore, as weakening demand and prices in its main European market offset a solid performance at home.

Shares in state-run Oil & Natural Gas Corp ended 3.05 per cent lower a day after posting a bigger-than-expected fall in July-September net profit due to higher subsidies.

Among gainers , United Spirits rose 1.3 per cent, while United Breweries Holdings Ltd rose 3.2 per cent after Diageo Plc agreed to buy a 53.4 per cent stake in United Spirits for Rs 11,167 crore.

Diageo will buy a 27.4 per cent stake in United Spirits and will launch a mandatory tender offer to buy 26 per cent more from the public shareholders of United Spirits.

UB group's debt-laden Kingfisher Airlines also ended 4.65 per cent higher following the Diageo deal on hopes the money raised could be used to revive the carrier.

Ashok Leyland rose 6.6 per cent a day after posting July-September earnings that were above forecasts.