By Raghavendra Upadhyaya MUMBAI--Indian shares ended lower Wednesday, tracking weak European stocks and the euro, and ahead of the monthly derivative contracts expiry. The Bombay Stock Exchange's benchmark Sensitive Index fell 62.24 points, or 0.3%, to close at 18,632.17 points, while the National Stock Exchange's 50-share Nifty dropped 10.45 points, or 0.2%, to 5,663.45 points. European stocks fell and the euro slid to a two week-low against the dollar as worries about Spain and Greece and the ongoing discord between euro-zone leaders roiled markets, while comments from a Federal Reserve official cast doubt on the effectiveness of its latest stimulus efforts. "The stocks have turned negative ahead of the September derivatives settlement Thursday, and (due to) weak global markets leading to worries over a likely fall in foreign investment flows into the country," said A.K. Prabhakar, senior vice president at Anand Rathi Securities. "They (foreign investors) would delay their investment into emerging countries like India if the economic situation in Europe stays troubled," said Mr. Prabhakar. Meanwhile, local investors preferred to buy defensive plays and wait to see the trend in foreign institutional investment. Foreign institutional investors bought a net $2.40 billion worth of Indian shares so far in September and $14.40 billion year-to-date. Consumer staples closed higher as they are considered to be the best defensive plays during times of uncertainty. Cigarette major ITC ended 1.0% up at 263.29 rupees ($4.9), while Hindustan Unilever gained 0.1% to close at 527.75 rupees. Pharmaceutical shares ended mixed: Cipla rose 2.7% to 372.60 rupees, while Sun Pharmaceuticals dropped 0.1% to 675.80 rupees. Telecom-services provider Bharti Airtel fell the most among the Sensex's 30 component stocks, closing 3.9% lower at 265.20 rupees ahead of an upcoming auction of mobile-phone spectrum in India in November. The Press Trust of India reported, citing an unidentified person, that energy major Reliance Industries is likely to bid in the spectrum auction. Reliance Industries' presence could increase competition in the telecom sector, which has just come out of a two-year price war. Investors also sold a few leading bank and cyclical stocks on concerns over Europe's volatile economic situation. Coal India fell 2.8% to 358.15 rupees, while Hindalco Industries dropped 2.2% to 116.65 rupees. HDFC Bank ended 1.0% lower at 630.25 and mortgage firm Housing Development Finance closed 1.1% down at 760.80 rupees. Write to Raghavendra Upadhyaya at raghavendra.upadhyaya@dowjones.com

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