Markets continue to trade weak, financials weigh

Benchmark indices continue to trade lower amid weak Asian cues, along with financial shares leading the decline as RBI announced fresh liquidity tightening measures.

By 10:10, the Sensex was lower by 84 points at 20,219 mark and the Nifty declined by 52 points at 6,025 levels.

Meanwhile, the market will remain volatile during the week as traders will roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series tomorrow.

On the global front, most Asian stock markets edged up in a tentative morning session on Wednesday, while the dollar treaded water, as investors awaited the latest reading on China's manufacturing activity to gauge the health of the world's second-biggest economy.  

The HSBC China flash PMI is scheduled to be released at 0145 GMT. Signs that Asia's powerhouse economy is slowing would weigh on equities markets and commodities prices, and might give the US dollar some support. In recent sessions, reports have suggested that China was moving to support its cooling economy.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3%.  Japan's Nikkei share average edged down 0.4% after a two-day rally.

Back home, Indian bond yields and swap rates surged after the Reserve Bank of India (RBI) moved to tighten rupee liquidity further in an attempt to shore up the weak local unit, which only edged up modestly despite the measures.  

The partially convertible rupee was at 59.53/54 per dollar, after rising to as much as 59.40 earlier, but still stronger than its close of 59.76/77 on Tuesday.

BSE Bankex has plunged by almost 3% followed by counters like Realty, Auto, Capital Goods, PSU, Consumer Durables, Metal and Metal, all declining between 0.1-1%.

Banking shares are under pressure on the bourses in early morning trades falling up to 8% after the Reserve Bank of India (RBI) has imposed some more measures to tighten liquidity to stabilize Indian rupee.

IndusInd Bank and Yes Bank were down by 8% each at Rs 426 and Rs 404 respectively, while Federal Bank and Axis Bank were slipped 5% each at Rs 362 and Rs 1,146 respectively on the Bombay Stock Exchange (BSE).

State Bank of India, ICICI Bank, HDFC Bank, Punjab National Bank, Oriental Bank of Commerce, Bank of India, Dena Bank, Canara Bank, ING Vysya Bank and Corporation Bank were down 2-5%.
    
Hero Moto has declined by nearly 2% ahead of quarterly results today.

On the gaining side, ONGC, Dr Reddy’s, Wipro, ITC and TCS have gained by 1% each.

Among other shares, Wockhardt has tanked 10% to Rs 746 in early morning deals on the National Stock Exchange (NSE). The stock opened at Rs 825 and touched a 52-week low of Rs 734 on NSE.

The market breadth in BSE remains weak with 754 shares declining and 447 shares declining.