BSE Sensex seen down after US, Asia drop

MUMBAI (Reuters) – The BSE Sensex is seen starting sharply lower on Friday after Asian stocks followed a plunge in U.S. markets on worsening economic woes, but some bargain buying may appear given the market has fallen for more than a week.

"The market will definitely open lower. But we have had a 7-day fall, so technically we are oversold," said Arun Kejriwal, director at advisory firm Kejriwal Research.

"People want to close positions before the weekend, so a lot of short positions may need to be covered."

Some late buying could come in banking, software and infrastructure-related stocks, which have been battered the most in the past two weeks, Kejriwal said.

The main BSE 30-share index fell 3.7 percent on Thursday to 8,451.01, its lowest close in more than three years. It has lost a fifth of its value over a seven-day losing streak, and losses for the 2008 have mounted to 58 percent.

Nifty futures traded in Singapore were down 3.1 percent at 0339 GMT, indicating a lower opening for the local market.

Asian stocks again fell on Friday, tracking losses in the United States where the Standard & Poor's 500 Index slumped to an 11-½ year low, with investors prefering government bonds and cash to stocks.

Japan's Nikkei share average was down 1.8 percent and the MSCI index of Asia-Pacific stocks excluding Japan was down 1.6 percent.