Indian shares see worst week since mid-March as volatility, foreign selling weighs
Updates with closing levels at 3:30 p.m. IST
By Bharath Rajeswaran and Hritam Mukherjee
BENGALURU, May 10 (Reuters) -Indian shares ended higher on Friday, but logged their worst week in eight as concerns over the outcome of ongoing national elections and selling by foreign investors weighed on sentiment.
The blue-chip NSE Nifty 50 .NSEI was up 0.44% at 22,055.20 points, while the S&P BSE Sensex .BSESN advanced 0.36% to 72,664.47, at close.
The benchmarks, however, logged their worst week since mid-March, dropping about 1.8% each and snapping two straight weeks of gains. Thevolatility index .NIFVIX gained 386 percentage points duringthe week to touch 18.47, a19-month high.
A lower voter turnout so far in India's general election has raised questions whetherPrime Minister Narendra Modi's Bharatiya Janata Party (BJP) and its allies can achieve the landslide victory predicted by opinion polls just a month ago. Counting of votes is scheduled for June 4.
Meanwhile, intense foreign selling - with investors offloading Indian shares worth $1.2 billion so far in May and paving course for the highest Foreign Portfolio Investment (FPI) sale since January - also pressured sentiment.
"Considering the higher risk-to-return ratio in India, expensive valuations and no indication of rate cuts happening immediately in the U.S., foreign investors have taken some money off the table," said Anita Gandhi, founder and head of institution at Arihant Capital Markets.
The recent strong performance of Chinese indices is also a trigger, prompting a shift of foreign inflows from the Indian to the Chinese market, said Santosh Pandey, president and head of Nuvama Professional Clients Group.
On Friday, nine of the 13 major sectors logged gains.
Drugmaker Cipla CIPL.NS fell 1.42% after it missed fourth-quarter revenue estimates. However, pharma stocks .NIPHARM ended 0.94% higher, cushioned by a 3.16%jump in Abbott India ABOT.NS after its quarterlyresults.
Energy stocks .NIFTYENR ended 1.64% higher, led by a 4.48% post-results rise in Bharat Petroleum Corp BPCL.NS as its margins outshone peers.
BPCL was also the top gainer on the Nifty 50 index, on the day.
MSCI EM index outperforms India's Nifty 50 in 2024 https://reut.rs/3UsoXW8
FPI selling in Indian shares intensifies in May https://reut.rs/3wqnLKZ
Weekly performance of India's key sectoral indexes https://reut.rs/3UzwN0e
Weekly performance of India's Nifty 50 stocks https://reut.rs/4busr13
Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza and Sonia Cheema
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