Sensex treads water ahead of Fed meeting

REUTERS - The BSE Sensex inched lower on Friday, heading for its worst week since early May, as investors stayed on the sidelines ahead of a speech by U.S. Federal Reserve Chair Janet Yellen in Jackson Hole, Wyoming later in the day.

Investors are wary Yellen will hint at a near-term interest rate hike, which could divert some of the massive liquidity that has underpinned emerging markets, after hawkish comments from a slew of other Fed officials recently.

Caution ahead of Yellen's speech has hit both global and Indian shares this week.

"Market is not expecting any immediate rate hike by the Fed but any indication of future rate hike will be key. Having said that, I think India still remains a preferred market versus emerging economies," said Daljeet Kohli, director and head of research at IndiaNivesh Securities.

 

The BSE Sensex traded flat as of 0612 GMT, but was down 0.9 percent for the week, heading for its worst weekly performance since the week ended on May 6.

The broader NSE Nifty was down 0.06 percent at 8,585.48 and 0.94 percent for the week, heading for its biggest weekly loss since the week ended on June 24.

Among gainers, Biocon Ltd rose as much as 5.1 percent to a record high after the European Medicines Agency on Thursday accepted the company and U.S. drugmaker Mylan's regulatory submission for proposed breast cancer drug

Auto maker Tata Motors Ltd was up 2 percent ahead of the company's June-quarter results later in the day.

But Welspun India Ltd fell 3.5 percent, extending declines for a fifth straight session as the fallout from Target Corp's decision to terminate business with the firm for passing off cheap sheets as premium Egyptian cotton escalated.

Gammon Infrastructure Projects Ltd declined 3.8 percent after the company on Thursday posted a marginal drop in June-quarter profit. The stock had gained 12.8 percent this week as of Thursday's close.

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Subhranshu Sahu)