Key benchmark indices slip 1%
ICICI Bank, ITC, L&T and RIL drags
After starting in the negative, the key benchmark indices slipped further as selling pressure intensified in ICICI Bank, ITC, L&T and Reliance Industries. The Sensex was down 166 points at 17,058 and the Nifty slipped 51 points at 5,176.
Meanwhile, in the broader markets, the midcap lost 0.6% and the smallcap index was down 0.4%, both outperforming the Sensex which lost 1%.
The rupee today again breached the 56-mark by losing 31 paise to 56.15 against the dollar in early trade to hit a fresh one-week low, due to strong demand for the American currency from banks and importers.
All the sectoral indices on the BSE continue to trade in the red. Metal lost further ground and was down over 2% closely followed by Capital Goods, Realty, Power, Auto and Bankex indices.
Dr Reddys Lab up 0.7% was the only Sensex stock in the green.
Metal scrips like Tata Steel, Sterlite and Hindalco down 2-3% were the major losers on the Sensex. Coal India,Tata Motors, ICICI Bank, L&T and SBI too shed 2% each. ITC and Reliance Industries lost 1% each.
Among other stocks, Berger Paints was up 3% at Rs 141 on reporting 19% jump in net profit at Rs 44 crore for the quarter ended June 2012, against Rs 37 crore in previous year quarter. Net sales grew 16% at Rs 803 crore on year-on-year basis.
The market breadth continued to remain negative. 1124 stocks declined while 903 stocks advanced on the BSE.
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(Updated at 9.40am)
The markets started off in the negative weighed by global cues and sell-off in Auto, Metal and Realty indices. At 9.40am, the Sensex down 134 points at 17,090 and the Nifty gave off 44 points at 5,184.
In the broader markets, the midcap index was down 0.3% almost in line with the Sensex underperforming the smallcap index down 0.1%.
Adding to the macro woes, the India Meteorological Department (IMD), for the first time, officially hinted at a drought-like situation, saying the southwest monsoon over India in 2012 is likely to be deficient at below 90 per cent of the Long Period Average.
The rupee fell to a one-week low in early trade on Friday as global risk assets retreated after the European Central Bank indicated willingness to buy government bonds but set conditions that disappointed markets.At 9.08 a.m., the rupee fell to 56.10/11 to the dollar versus its last close of 55.84/85. It fell to as low as 56.18 to the dollar, its lowest since July 26.
In the international markets, US stocks fell for a fourth day on Thursday after European Central Bank President, Mario Draghi, disappointed investors hoping for immediate action to contain the euro-zone debt crisis.
The Dow Jones industrial average and the Standard & Poor's 500 Index lost 0.7 per cent each.
Asian shares eased on Friday as the European Central Bank, after inaction from the Federal Reserve, disappointed markets looking for an imminent move to deal with the euro zone debt crisis, spurring risk aversion. Nikkei was down nearly 2% along with Hang Seng and Taiwan Weighted down 1% each.
Back home, the Nifty is likely to seek support around 5,217 – 5,210 and can face resistance around 5,238 – 5,245, technical analysts suggest.
Among the sectoral indices, Auto, Metal and Realty indices started down 1% each closely followed by Bankex, Capital Goods, Power and Oil & Gas indices losing 0.3-0.6%.
Dr Reddys Lab, ONGC, NTPC, Gail India and Infosys up 0.2-1% were the only gainers among the Sensex stocks in the opening trades.
Among the losers were Tata Motors, Tata Steel, Sterlite, SBI, Hindalco, Tata Power, Mahindra & Mahindra, ICICI Bank and Coal India down 1-2%.
Among other stocks, Mahindra Satyam shot up 3% to Rs 85.85 after reporting better-than-expected 56% year-on-year growth in net profit at Rs 352 crore for the quarter ended June 2012, aided by a weak Indian rupee that sharply expanded the software exporter's margin. Analysts on an average had expected net profit of Rs 283 crore for the quarter.
The market breadth was negative. 462 stocks declined while 306 stocks advanced on the BSE.