Indian shares ended down on Friday from a near two-month high hit earlier in the session, as a slump in IT shares on worries over H-1B visas outweighed positive sentiment from continued gains in Asian stocks. The Nifty IT index dropped 2.79 percent. The broader NSE index ended down 0.36 percent at 8,243.8, after hitting its highest since November 11 earlier in the day. The index ended 0.71 percent higher for the week, its second such gain.

The benchmark BSE index closed down 0.44 percent at 26,759.23, but gained 0.50 percent for the week. However, overall sentiment remained upbeat with the broader NSE index heading for a weekly gain of 1 percent in what could be its second such rise. The index also crossed above its 200-day exponential moving average on Thursday, an indicator of a further upside.

Gains in Asian shares, with MSCI's ex-Japan Asia-Pacific shares index at four-week highs, have come as investors are increasingly hopeful about quarterly earnings and that the government will deliver a fiscally responsible budget on February 1. "A pre-budget rally in the month of January is anticipated and soon we will see corporate earnings unfold where markets will get a direction from," said Gaurang Shah, vice president, Geojit BNP Paribas.

IT stocks were among the biggest losers as two US lawmakers reintroduced a bill to curb the use of H-1B visas, including requiring employers to pay more for workers under the system. The Nifty IT index fell as much as 3.2 percent in its biggest percent loss since November 9. HCL Technologies and Tech Mahindra declined up to 4.5 percent each. But financials supported the index most with the NSE Bank index gaining as much as 1.16 percent. ICICI Bank and State Bank of India rose 1.5 percent each.

Copyright Reuters, 2017