December 21, 2012 / 11:08 AM / 5 years ago

Indian shares fall for second week; US fiscal cliff, derivatives expiry key

* 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 (Reuters) - 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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