By Bharath Rajeswaran and Hritam Mukherjee
(Reuters) -Indian shares recouped early losses on Friday, but remained on course for their worst week in more than two years after a deluge of foreign outflows and on concerns about the deepening conflict in the Middle East.
The Nifty 50 index was down 0.16% at 25,210.1 points as of 10:27 a.m. IST, while the S&P BSE Sensex shed 0.13% to 82,390.71. They fell about 0.6% in early trade.
Still, the Nifty and Sensex are down 3.6% for the week, headed for their worst week since June 2022, with most of that due to a 2% slump on Thursday.
The escalating Middle East conflict raised worries that crude supplies from the top oil-producing region may be disrupted. That has pushed crude prices higher, which hurts net importers such as India.
Geopolitical tensions between Israel and Iran coupled with a rise in foreign outflows have played a major role in the drop in equities this week, said A Balasubramanian, managing director and chief executive at Aditya Birla Sun Life Asset Management Company.
Foreign outflows from Indian markets hit a record high on Thursday.
Over the last three sessions, foreign institutional investors have offloaded shares worth $3.65 billion, with analysts suggesting that FIIs are directing inflows into China after its recent stimulus measures.
The broader, more domestically-focused small- and mid-caps traded flat on the day.
Among stocks, Bajaj Finance fell 2% and was the second-biggest loser on the Nifty 50. Jefferies said the non-bank lender’s pre-earnings update showed a moderation in assets under management, with a 12% sequential drop in new loan bookings.
Mahindra and Mahindra Financial Services dropped about 3% after posting a drop in disbursements in the September quarter.
Avenue Supermarts fell 4% after its standalone revenue for the September quarter missed market expectations.
(Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips, Sonia Cheema and Savio D’Souza)
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