Sensex posts biggest weekly fall in 8 mths

By Janaki Krishnan

MUMBAI (Reuters) - Indian shares fell 1.8 percent on Friday and posted their biggest weekly fall in more than eight months as concern about the economy kept investors jittery, but Infosys bucked the trend and rallied on strong quarterly result.

Infosys Technologies, the country's No. 2 outsourcer, reported a better-than-expected 17 percent rise in June quarter profit and marginally raised full-year forecast but

warned the business environment was still challenging.

However, a poor start to monsoon rains, crucial for India's domestic demand-led economy, and lingering concern about a world recovery weighed.

The 30-share BSE index fell 1.84 percent, or 253.24 points, to 13,504.22, its lowest close after the ruling coalition won re-election in mid-May and triggered a strong rally.

"I have been expecting a fall but not to this extent," said Ambareesh Baliga, vice president, Karvy Stock Broking. "Some foreign funds were selling."

Twenty-four index components ended down in choppy trade as a pullback of more than 1 percent at one stage triggered heavy profit-taking in the last half hour.

"The immediate reason for the fall is a sell-off by some hedge funds due to redemption pressures from their investors. The biggest worry for the market, apart from the monsoons, is the global economic crisis," said R.K. Gupta, managing director, Taurus Mutual Fund.