* BSE index falls 1.09 pct; NSE ends 1.16 pct lower * U.S. budget setback hits shares * Bharti Airtel drops on federal police charges By Abhishek Vishnoi MUMBAI, Dec 21 Indian shares ended lower on Friday, marking a second week of declines, as lenders were hit by profit-taking, while Bharti Airtel fell after federal police filed charges as part of a probe into alleged corruption in allocation of mobile airwaves. The market also tracked weak global shares after a Republican proposal to deal with a U.S. fiscal crunch failed to get enough support, deepening uncertainty over the U.S. can avert the "fiscal cliff" of automatic spending cuts and tax increases set to start Jan. 1. Indian shares are expected to remain volatile next week amid uncertainty around the U.S. "fiscal cliff" and as markets head into the last derivatives expiry of 2012 on Thursday. "Markets are hoping for a solution to the U.S. fiscal cliff issue because if a solution is not reached, it can impact sentiment negatively," said Dipen Shah, Head of Private Client Group Research, Kotak Securities. "We expect the issue to be resolved and the same can provide relief in short term," he added. The benchmark BSE index fell 1.09 percent, or 211.92 points, to end at 19,242, marking its biggest single-day percentage fall since Oct. 30, and ending 0.39 percent lower for the week. The broader NSE index shed 1.16 percent, or 68.70 points, to end at 5,847.70, closing below the psychologically key 5,900 level, also ending down 0.54 percent for the week. Bharti Airtel shares ended 3 percent lower after India's federal police filed charges against the company and Vodafone Group Plc's India unit on Friday as part of a probe into alleged corruption in the allocation of mobile phone airwaves a decade ago. Banking shares such as State Bank of India fell 2 percent on profit-taking, after gaining 9.7 percent in Decmeber, as of Thursday's close. Mahindra & Mahindra shares ended 1.6 percent lower on earnings concerns, after the automaker said it would buy Navistar International's 49 percent stake in its two joint ventures, in a $33 million deal. Mahindra automotive president Pawan Goenka told analysts on Thursday that M&M's board has given executives three years to bring the two companies to profitability. Blue Star shares fell 2.5 percent, while Voltas shares lost 3.9 percent after Nomura said it has come away "with extremely negative takeaways" for the Indian heating, ventilation and air conditioning (HVAC) market after meeting a Blue Star executive in charge of the segment. However, among gainers, Mahindra and Mahindra Financial Services Ltd ended 1.3 percent higher after the board approved a stock-split in the ratio of five new shares for ever one held. Shares is Adani Enterprises Ltd ended 0.7 percent higher after earlier gaining as much as 5 percent in early trade after its promoters set the floor price for a share sale at 282 rupees per share. For additional stocks on the move double click FACTORS TO WATCH * Euro falls, yen rebounds as U.S. budget talks stall * Brent slips below $110 as U.S. fiscal talks stall * U.S. budget setback hits shares, euro * Foreign institutional investor flows * For closing rates of Indian ADRs ASIA-PACIFIC STOCK MARKETS: Pan-Asia........ Japan....... S.Korea... S.E. Asia....... Hong Kong... Taiwan.... Australia/NZ.... India....... China..... OTHER MARKETS: Wall Street .... Gold ....... Currency.. Eurostocks..... Oil ........ JP bonds... ADR Report ..... LME metals. US bonds.. Stocks News US.. Stocks News Europe DIARIES & DATA: Indian Data Watch Asia earnings diary U.S. earnings diary European diary Indian diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news, double click on: U.S. company news European company news Forex news Global Economy news Technology news Telecoms news Media news Banking news Politics/General Asia Macro data <ECONASIA (Additional reporting by Manoj Dharra; Editing by Sunil Nair)
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