Sensex heads for second straight weekly fall

MUMBAI (Reuters) - The BSE Sensex and Nifty were trading lower on Friday, heading towards their second consecutive weekly fall as overseas investors continued to cut positions amid lower-than-expected corporate earnings and tax-related worries.

Markets across the region also edged down, while sentiment remained cautious ahead of the expiry of the monthly derivatives contracts due next week.

Overseas investors sold Indian shares worth 2.76 billion rupees ($43.60 million) on Thursday, provisional exchange data showed, after they offloaded a net 9.1 billion rupees in the previous session.

The Reserve Bank of India is likely to cut interest rates again next month, with analysts polled by Reuters forecasting a strong probability that will act ahead of scheduled policy meetings, as it has done so far this year.

 

"Delay in land acquisition is a serious matter. Corporate earnings will take a big hit, at least in the near future. This may affect EPS growth," said Deven Choksey, managing director at KR Choksey Securities.

"Subdued EPS outlook is resulting in withdrawal of funds, at least by FII traders."

The benchmark BSE Sensex fell 0.43 percent to 27,615.91, down 3 percent this week, while the broader Nifty dropped 0.48 percent to 8,358, lower 2.9 percent in the week.

Both the indexes were heading towards their lowest close in a month.

Blue chips fell. Infosys Ltd , which is due to report its earnings later in the day, fell 0.8 percent.

Larsen & Toubro was down 1.9 percent after a 1.3 percent fall in the previous session, while Housing Development and Finance Corp declined 2.3 percent.

Crompton Greaves fell 2.5 percent after the company announced the sale of its consumer electricals unit to a consortium led by U.S. private-equity fund Advent International.

Mahindra & Mahindra Financial Services gained as much as 3.9 percent after the company's gross bad loans declined to 5.9 percent of total advances in January-March compared with 7.1 percent in October-December.($1 = 63.3100 rupees)

(Reporting by Indulal PM; Editing by Subhranshu Sahu)