BSE Sensex slips 0.4 percent on global credit worries

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The benchmark BSE 30-share index closed 73.56 points lower at 20,030.83, with 15 components in the red. The index had hit an all-time high of 20,498.11 points on Thursday but rose a mere 0.3 percent on the week.

On Thursday, Lehman Brothers warned of more write-downs, while a credit ratings downgrade for Citigroup highlighted the ongoing threat to financial firms from the subprime mortgage meltdown.

Despite having no direct exposure to the U.S. mortgage market, nervous investor sentiment towards financial firms hit local lenders, with ICICI Bank extending losses for the third day in a row.

The stock fell 2.9 percent to 1,206.85, its lowest in a week.

Top mortgage firm Housing Development Finance Corp was down 2.5 percent to Rs.3,058.80.

But analysts say a slow down in the United States, the world's biggest economy, is good news for emerging markets such as India, as they see more foreign fund flows being poured into Asia's third-largest economy.

"We do not see a substantial downside to the market given the likely good liquidity and general acceptance of India's long-term growth story, which will attract inflows at moderately lower market levels," local brokerage Kotak Securities said in a report on Indian equities for the year 2008.

Shares in Bharti Airtel were down nearly 3.5 percent at Rs.952.55. On Wednesday, a telecoms tribunal ruled in favour of new players over spectrum allocation, a move which could increase competition.

In the broader market 2,048 gainers defeated 820 losers on a total volume of about 750 million shares.

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