Sensex posts biggest weekly fall in eight weeks

The BSE Sensex and Nifty fell on Friday to mark their biggest weekly decline in eight as profit-taking hit blue chips such as Reliance Industries for a third consecutive day, extending the weak start to 2014.

The Sensex has fallen in each of the three trading sessions of the New Year, declining 1.35 per cent after gaining 8.9 per cent last year on the back of strong foreign buying.

Losses also tracked lower Asian shares after a sudden reversal in some very popular, and thus crowded, trades sparked a bout of global risk aversion.

Caution is also setting in ahead of the start of the corporate earnings reporting season, with Infosys results on January 10.

"Q3 earnings would be slightly better than Q2. One should just focus on good quality businesses amid this volatility like ITC, Lupin" said Vivek Mahajan, head of research at Aditya Birla Money.

The Sensex fell 0.18 per cent, or 37 points, to end at 20,851.33 and a weekly fall of 1.6 per cent.

The Nifty fell 0.16 per cent, or 10 points, to end at 6,211.15. It also ended down 1.6 per cent for the week.

Both indices marked their biggest weekly fall since the week ended November 8.

Reliance Industries shares fell 1.2 per cent, while Larsen and Toubro ended 2.3 per cent lower.

Among other blue chips, ICICI Bank fell 0.8 per cent, while Mahindra and Mahindra slumped 3.8 per cent.

ICICI Bank has retraced almost the entire gain of 2.9 per cent made in December over the last three trading sessions.

Tata Motors fell 2.6 per cent after December sales fell by 42 percent to 37,852 vehicles.

Among stocks that gained, Multi Commodity Exchange of India surged 17.8 per cent on acquisition hopes, after the Bombay Bullion Association said on Wednesday it was considering buying a 5 per cent stake in the company.

Software exporters were also in demand ahead of Infosys Oct-Dec results next week. Infosys ended 2.4 per cent higher, while Tata Consultancy Services rose 2.6 per cent.

Copyright @ Thomson Reuters 2014