BSE Sensex falls 114 points; profit-booking weighs

MUMBAI (Reuters) - The BSE Sensex fell on Friday to mark its lowest weekly close since January 13 after a sudden slump in Tata Motors and Ultratech Cement shares about 20 minutes before the close spooked investors.

Tata Motors Ltd (TAMO.NS) and UltraTech (ULTC.NS) shares briefly dropped as much as 10 percent each, before sharply cutting losses, after a series of shares were sold at lower prices. (Read story, click here)

INTRA-DAY GRAPHS

Tata Motors, click r.reuters.com/gyr65t

UltraTech, click r.reuters.com/hyr65t

The sharp falls in shares of the two companies sparked reminders of a flurry of erroneous orders for a broad basket of shares placed by Emkay Global that sent the stock market tumbling in October.

Analysts say such incidents can sap the confidence of investors at a time when the RBI has cautioned that further rate cuts are conditional on government action to control India's twin deficits.

"These incidents would affect sentiment of investors and government should therefore bring the physical settlement of derivatives to avoid such instances," said Kishor Ostwal, chairman and managing director, CNI Research.

The BSE Sensex fell 0.57 percent, or 113.79 points, to end at 19,781.19. It lost 1.6 percent for the week.

The broader Nifty fell 0.59 percent, or 35.85 points, to end at 5,998.90, closing below the psychologically important 6,000 level, also ending 1.2 percent lower for the week.

The sudden fall in the share prices of these index stocks added to investor worries after Indian manufacturing slowed to a three-month low in January, and Bharti Airtel Ltd (BRTI.NS) missed its earnings estimates by a wide margin.

Shares also fell on profit-taking after the BSE Sensex added 2.4 percent in January to post its third-straight monthly gain.

Tata Motors shares fell 5.49 percent after six separate block deals comprising 2.07 million shares took place at an average price of 274.92 rupees. The sales sent the auto maker's shares as low as 268.25 rupees.

UltraTech shares fell 3.4 percent after one block deal of 41,863 shares at an average price of 1,853.80 rupees. They dropped as low as 1,712.35 rupees.

Shares in Bharti Airtel, India's top telecoms carrier, fell 3 percent, after October-December profit missed estimates by a wide margin.

Bharat Heavy Electricals Ltd (BHEL.NS) shares fell 1.2 percent after India's top power equipment maker missed analyst estimates with a 17.5 percent fall in third-quarter net profit, hit by a slowdown in new orders.

Hindustan Unilever (HLL.NS) fell 1.9 percent after Morgan Stanley reduced its weightage on consumer staples stocks in its Indian model portfolio by 1 percent. It also raised weightage of energy stocks to 3 percent.

Satyam Computer Services (SATY.NS) shares fell 1.6 percent after Kotak Institutional Equities downgraded it to "reduce" from "add", noting October-December revenue growth was "muted", given the impact from furloughs in the high-tech and manufacturing segments.

Among the gainers, Maruti Suzuki India (MRTI.NS) shares rose 1.8 percent after reporting better-than-expected January vehicle sales at 114,205 units.

Bajaj Auto (BAJA.NS) shares also rose 1.4 percent ahead of its monthly sales data.

(Additional reporting by Manoj Dharra; Editing by Prateek Chatterjee)