Sensex set for second weekly loss; U.S. payrolls data eyed

REUTERS - Indian shares edged lower on Friday, heading for their second consecutive weekly fall, on caution ahead of a U.S. payrolls report for April that could influence bets on future U.S. rate hikes.

Analysts expect U.S. nonfarm jobs to have increased by 202,000 jobs in April, a sign of economic resilience that could allow the Federal Reserve to gradually raise interest rates this year.

Despite the fall, analysts said Indian shares would likely remain supported in the months ahead after January-March earnings proved resilient and as the monsoon is expected to be above average.

"Overall, India macro situation remains very healthy and good and some of the sectors are beginning to show significant improvement, especially infrastructure," said Vinay Khattar, senior VP-head research at ?Edelweiss Securities.

"Liquidity will remain normal and India will continue to attract flows given the macro scenario and pickup in demand."

The broader NSE Nifty slipped 0.15 percent to 7,724.10 as of 0837 GMT. The index is down nearly 2 percent on the week, after falling 0.7 percent last week.

The benchmark BSE Sensex was 0.21 percent lower at 25,209.78. It has lost 1.6 percent so far this week, after falling 0.9 percent last week.

ITC was flat after hitting a two-month low earlier in the sesssion as the tobacco company shut cigarette plants to comply with a new stipulated pictorial warnings rule issued by the government.

Adani Port and Special Economic Zone fell 1.2 percent, taking the week's decline to 18 percent, the biggest weekly loss since October 2008 after its March-quarter results failed to cheer investors.

Among the gainers, Bharti Airtel rose 1 percent after India's largest telecoms network operator divested 950 telecom towers in the Democratic Republic of Congo to Helios Towers Africa to reduce debt.

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Biju Dwarakanath)