* Infosys outlook below expectations, shares plunge 21.3 pct
* Defensive stocks gain as Infosys results spook cyclicals
* Wholesale price data, earnings next week key triggers for markets
By Swati Bhat and Abhishek Vishnoi
MUMBAI, April 12 (Reuters) - Indian shares recorded their biggest single-day fall since late February on Friday after lower-than-expected revenue guidance from Infosys raised concerns about the outlook for the software services exporting sector.
The benchmark share index closed down for a second straight week, having fallen in six of the last eight trading sessions. The index lost 1.1 percent this week, with foreign investors selling shares worth a net 269 million rupees over six days to Wednesday.
Concerns about the economic outlook and political stability have sparked a selloff in shares. Data on Friday showed sluggish industrial output, although a separate report showing slowing consumer inflation raised hopes the central bank may cut interest rates next month.
Those hopes lifted banking shares such as ICICI Bank Ltd , although the gains were not enough to offset steep falls in technology stocks following the Infosys results.
"Monday's inflation figure's influence on RBI policy and earnings would decide the near-term trend. Expectations were very high and therefore such a big reaction has come," said Sandip Sabharwal, CEO - PMS at Prabhudas Lilladher.
Wholesale inflation data due on Monday will set the tone for the coming week. Wholesale prices are expected to have risen 6.40 percent in March from a year earlier, according to a Reuters poll.
"Across most sector people have become very sceptical on earnings," Sabharwal added.
The 30-share benchmark BSE index closed down 1.62 percent, or 299.64 points, at 18,242.56, posting its biggest single-day fall since Feb. 26.
The 50-share NSE index ended down 1.17 percent, or 65.45 points, at 5,528.55, and posting a 0.44 percent fall for the week.
Infosys Ltd, India's second biggest software exporter, slumped 21.3 percent, posting in its biggest single-day percentage fall in a decade on the more actively traded NSE.
The slump came after Infosys forecast full-year sales growth that missed analyst expectations, dimming hopes the company will soon start reaping the benefits of its strategic revamp.
Other software services exporters also fell. Tata Consultancy Services Ltd lost 1.64 percent, Wipro Ltd fell 4.75 percent, while HCL Technologies Ltd ended down 1.77 percent.
However, banking shares gained on hopes the Reserve Bank of India will cut interest rates for a third time this year at its May 3 policy review. However, investors are closely eyeing wholesale price inflation data on Monday to set their expectations.
State Bank of India Ltd gained 1.9 percent, ICICI Bank Ltd rose 0.5 percent and HDFC Bank Ltd rose 0.7 percent.
Shares perceived to be defensive gained following the disappointing earnings of the more cyclical Infosys. ITC Ltd rose 2.7 percent, while Hindustan Unilever Ltd rose 1.6 percent.
Among other defensive stocks, drugmaker Dr. Reddy's Laboratories Ltd rose 1 percent.
Reliance Industries also gained 0.6 percent ahead of its earnings on Tuesday.
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FACTORS TO WATCH * Yen recovers, euro falls one percent on day * Brent oil falls to 8-month low; demand growth falters * Shares set for second best week of 2013 * Foreign institutional investor flows * For closing rates of Indian ADRs
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