By Abhishek Vishnoi
MUMBAI (Reuters) - The BSE Sensex fell on Friday to close at its lowest in 1-1/2 weeks, as lenders such as Punjab National Bank fell after reporting a rise in bad assets in the July-September quarter, while Hindustan Unilever fell on disappointment over its volumes growth.
Falls also tracked lower European share markets as lacklustre corporate earnings reports undermined investor confidence ahead of U.S. growth data due later on Friday.
Earnings will likely continue driving markets next week, including from Maruti Suzuki
The RBI is expected to keep repo rate unchanged given inflation remains sticky. Instead, analysts see a cut in the cash reserve ratio, or the amount of deposits lenders must keep with the central bank, as the more likely outcome.
Investors are also waiting for a potential cabinet reshuffle that local media reports say could come on Sunday, although the top ministries are seen unlikely to be affected.
"Earnings have been okay for most of the index names but this market is liquidity driven and that is now drying up," said Vivek Mahajan, head of research at Aditya Birla Money.
"Now RBI policy and cabinet reshuffle would be key to set the tone for the market," he added.
The BSE Sensex fell 0.71 percent, or 133.29 points, to 18,625.34 points, marking its lowest close since October 17. The index fell 0.3 percent for the week.
The 50-share Nifty fell 0.72 percent, or 41 points, to 5,664.30 points. The index fell 0.35 percent for the week.
Punjab National Bank's
The results in the two state-run banks hit State Bank of India
India's biggest private sector lender ICICI Bank
Hindustan Unilever Ltd
Personal care and food products maker Dabur India Ltd
Shares in CESC Ltd
However, among gainers, shares in Mahindra & Mahindra
UBS also upgraded Mahindra & Mahindra to 'buy' from 'neutral' citing a "strong" outlook for profit margins.
Kingfisher Airlines Ltd
The Directorate General of Civil Aviation (DGCA) said on Friday Kingfisher will use its own money as it tries to resume flying, a day after the grounded carrier persuaded striking staff to return to work.
Hindustan Construction Company Ltd
(Additional reporting by Manoj Dharra; Editing by Rafael Nam)