Sensex falls for third straight day

The BSE Sensex erased earlier gains to close flat on Friday, marking a third consecutive weekly fall, as blue-chips such as ITC were hit by profit-booking on continued signs that foreign investors' appetite for domestic shares is starting to wane.

Foreign institutional investors (FIIs) sold shares worth Rs 59.8 crore on Thursday, snapping a 32-day buying streak that totalled Rs 23,884 crore, exchange and regulatory data show. Signs that overseas funds are losing interest in Indian shares come amidst renewed fears the Federal Reserve will move to taper its monetary stimulus.

Caution is also setting in ahead of key economic indicators next week including gross domestic product data and fiscal deficit numbers.

"The only positive flow could come from some sort of change from overseas cues and that is where the big trigger lies," said Prakash Diwan, head of Institutional Clients Group at Asit C Mehta Investment Intermediates.

The benchmark BSE Sensex closed down 0.06 per cent, or 11.66 points, at 20,217.39 points, falling 0.7 per cent for the week.

The broader Nifty also closed down 0.06 per cent, or 3.60 points, at 5,995.45, staying below the psychological 6,000 point mark. It fell one per cent for the week. Profit-taking continued to weigh on recent blue-chip gainers. Tata Motors fell 2.4 per cent on Friday and posted a 3.3 per cent weekly fall, its biggest since the week ended on August 23.

ITC ended 1.36 per cent lower and was down 1.83 per cent for the week.

Recently IPO-ed Search service provider Just Dial, which peaked to an all-time high of Rs 1,438.70 on Wednesday, gave up some gains falling for a second consecutive day. The stock closed down 3.81 per cent, adding to its 6.96 per cent fall on Thursday.

Among gainers, Cairn India closed 3.1 per cent higher after the oil explorer said its board would meet on Tuesday to consider a buy back of shares.

Tea producer McLeod Russel India gained 1.56 per cent, as investors closed outstanding open positions in November futures contracts leading to a short-covering rally.

Shares in United Spirits, 25 per cent owned by Diageo PLC, gained 4.44 per cent after rating agency ICRA upgraded its rating on company's loans and other debt facilities to take into account Diageo Plc's takeover of the Indian spirits maker this year.