Sensex heads towards third straight weekly fall

MUMBAI (Reuters) - The BSE Sensex and Nifty hovered near their lowest in more than 10 weeks in a volatile session on Friday, heading for a third consecutive weekly loss as caution prevailed over concerns about rising tensions in the Middle East.

Foreign institutional investors sold a net 5.21 billion rupees ($83.22 million) worth of shares on Thursday, in a session that saw both indexes falling to their lowest since Jan. 14 after Saudi Arabia and its Gulf Arab allies launched air strikes in Yemen. It was the first day of net sales by overseas funds in six sessions.

Sentiment thus remained weak. Should indexes post losses for the day, it would mark an eighth consecutive session of declines, the longest losing streak in over 18 months.

But broader losses were capped as software services exporters such as Infosys gained after global rival Accenture PLC on Thursday raises revenue growth forecast for second time.

"We are advising people to be cautious as we see some more pain. Any fresh buy can happen only in the second week of April," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.

The benchmark BSE Sensex fell 0.1 percent to 27,422 points, heading for a 2.9 percent weekly loss.

The broader Nifty is down 0.21 percent to 8,324.35 points.

Recent outperformers led the decliners. Sun Pharmaceutical Industries which gained 16.9 percent this month till Thursday, fell 1.2 percent, while Dr Reddy's Laboratories fell 2.1 percent after gaining 5.1 percent so far this month till Thursday.

Technology stocks led the gains. Infosys gained 3.3 percent while Tata Consultancy Services added 1.4 percent.

($1 = 62.6050 rupees)

(Reporting by Indulal PM; Editing by Sunil Nair)