BSE Sensex posts worst week in over three months

By Swati Bhat

MUMBAI (Reuters) - The BSE Sensex fell for a fourth consecutive session to post its worst weekly decline in more than three months as profit-taking continued to hit blue chips after the benchmark index hit a recent record high.

Traders said they expect the consolidation mode in markets to continue in the near term with the last leg of the blue chip earnings due next week, including from State Bank of India.

The near-term outlook for the market is likely to be driven by data, with the U.S. monthly employment report likely to set direction early next week, while investors are also looking forward to domestic industrial production and inflation reports.

"Largely we don't see much scope for re-rating of PE multiples. Earnings growth would be good single digits or poor double digits, so we don't expect markets to do better than that," said Pankaj Pandey, head of research at brokerage ICICI Direct.

"Sectors and particularly companies which have had good earnings and are still not too expensive will continue to do well in the near term. So IT and pharma should continue to do well," he added.

The Sensex closed down 0.75 percent at 20,666.15. It dropped 2.7 percent on the week, its biggest weekly fall since the week to August 2 after hitting a record high of 21,321.53 in a special session on Sunday.

The broader Nifty closed down 0.75 percent at 6,140.75, falling 2.8 percent on the week, its worst week since September 27.

On a more positive note, overseas funds have been buyers of equities for the last 24 consecutive sessions with total inflows so far in 2013 now at $16.6 billion.

Blue chips such as Tata Consultancy Services Ltd fell 1.5 percent on profit-taking, while Housing Development Finance Corp dropped 3.9 percent.

Meanwhile, banks fell due to concerns about their earnings. Punjab National Bank (PNB) fell 4.3 percent after its July-September net profit halved and came in at sharply below consensus estimates.

The Bank Nifty shed 1.3 percent.

Shares of SpiceJet Ltd closed down 4.8 percent after the Indian airline posted a record quarterly loss due to high fuel prices and a weaker rupee during the July-September period.

Tech Mahindra shares on the other hand closed up 6 percent at 1,675 rupees, after hitting 1,687 rupees, its highest since May 2007 after the company's July-September earnings beat some analysts' estimates.

Nestle India Ltd benefited after index provider MSCI said on Thursday it would add their shares to its MSCI India index. Yes Bank also rose on its inclusion before banking shares were broadly hit.

Tata Motors closed up 1.05 percent ahead of its earnings which came just after market close. The stock likely to gain further on Monday, traders said, after the country's biggest automaker by revenue, beat analyst estimates by posting a 71 percent jump in profit, its first quarterly gain in a year.

(Editing by Anand Basu)