MUMBAI, May 30 (Reuters): Indian shares fell on Friday to mark their first weekly fall in four, as blue-chips such as State Bank of India declined after foreign investors sold shares for a fourth consecutive session, while caution was also seen ahead of GDP data and the central bank's policy review.
A Reuters poll predicts no clear improvement in Asia's third-largest economy, which is likely to have grown by 4.8 per cent from a year earlier, while rates are expected to be kept on hold by the central bank on June 3.
Foreign institutional investors, who supported the sharp rally in Indian shares in May, continued selling on Thursday, their fifth session of sales in the last six. Overseas investors sold Indian shares worth 5.23 billion rupees ($88.6 million) on Thursday, provisional exchange data showed.
"Market has given a correction and its a healthy correction. This seems to be a buy-on-dips market. At every level, we have seen individual stocks outperforming," said Deven Choksey, managing director, KR Choksey Securities.
"We have RBI policy next week, and I don't think rates will be changed. We have more policy measures from the government to watch in the coming weeks, which will have an impact on markets."
The benchmark BSE index closed 0.07 per cent lower at 24,217.34 points. It fell 1.9 per cent in this week, but gained 8 per cent in May.
The broader NSE index ended down 0.08 per cent at 7,229.95 points. It lost 1.86 per cent this week, while gaining 8 per cent during the month.
Banking stocks led the declines with NSE's bank index falling 1.6 per cent on profit-taking. The index gained 15.1 per cent in May and investors were encashing positions ahead of the RBI policy meet, traders said.
State Bank of India fell 2.3 per cent while ICICI Bank ended 1.3 per cent lower.
Tata Motors Ltd closed down 2.2 per cent after its earnings missed some analysts' estimates.
However, shares in defence equipment makers rallied on media reports of a potential increase in foreign direct investment limit in the sector from current 26 per cent.
Bharat Electronics gained 1.9 per cent, BEML surged 6.6 per cent and Pipavav Defence and Offshore Engineering Co rose 5 per cent.
Defensives such as pharma and healthcare stocks gained on value-buying. Hindustan Unilever gained 8.4 per cent, Dr Reddy's Laboratories added 3.2 per cent and Cipla Ltd ended 3.3 per cent higher.
Shares in Mahindra & Mahindra gained 4.97 per cent after its Jan-March earnings beat estimates.
Voltas Ltd surged 3.8 per cent after Jan-March earnings came in sharply ahead of some analysts estimates, led by strong margin expansion in its cooling products business.
