Markets end lower amid weakening rupee

Reliance Ind, Infoys, HDFC top Sensex losers

Markets ended lower on Friday, amid a volatile trading session, after the rupee slumped to an all-time low against the dollar as foreign investors shunned risky assets and month-end demand for the greenback from Indian refiners for oil imports.

The 30-share Sensex provisionally ended down 65 points at 16,968 and the 50-share Nifty ended down 19 points at 5,146.

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(Updated at 14:28 hrs)

Markets have recoeverd from the day's low in a volatile session of trade. The Sensex, after a soft start, dipped to a low of 16,808. However, it has now recovered marginally and is trading at 16,960 - down 72 points. Nifty is down 22 points at 5,145.

In Asia, markets dipped on worries of slowdown in the world economy. Ratings downgrade of several banks led to investors shying from riskier assets. Japan's Nikkei average fell 0.3% to 8,798 as data showing US manufacturing grew at its slowest pace in 11 months in June added to concerns about weaker growth in Europe and China, but the index was still headed for best weekly gain in four months. Kospi tumbled 2.2% to 1,847.

The rupee plunged by 57 paise to a new low of Rs 56.87 against the dollar in early trade today on increased capital outflows and rising demand from importers for the American currency. Besides, strengthening of dollar against the euro also put pressure on the local unit.

BSE metal index has dropped 1.6% to 10,323. Capital goods, bankex and FMCG indices were also showing weakness. Auto index bucked the trend and advanced 0.15% at 9,343 following the Calcutta High Court ruling on Singur Land case.

Reliance continued to be the top dragger among Sensex stocks - down 1% at Rs 710. HDFC and Infosys were among the key losers. Metal shares - Hindalco and Tata Steel declined 2-3% each following the sell-off in global commodities.

Meanwhile, Maruti Suzuki advanced 1.7% to Rs 1,109. ONGC and Cipla added 1.4% aech. Among other gainers were TCS and Hero MotoCorp.

The Calcutta High Court today struck down the Singur Land Rehabilitation and Development Act, 2011, provising relief to Tata Motors. A division bench of the High Court set aside an earlier single bench order that had upheld the Act and held the piece of legislation as unconstitutional and void as President's assent had not been taken. Tata Motors was trading flat at Rs 248.

Shares of cement makers are under pressure in opening deals after the competition watchdog, Competition Commission of India, (CCI) imposed a hefty penalty of about Rs 6,300 crore on eleven leading cement companies for price cartelisation.

ACC, Ambuja Cements, Ultratech Cements, JK Cement, India Cements, Madras Cements and Century Textiles are trading lower by more than 3-4% each on the Bombay Stock Exchange.

"Cement stocks moved well before CCI order. Now some profit booking can be observed after the CCI order. ACC has strong hurdle at Rs 1265, Ambuja hurdle is seen at Rs 172," said Chandan Taparia, Derivative Analyst, Anand Rathi Financial Services.

BSE market breadth is negative. Out of 2,737 stocks traded, 1,382 shares declined while 1,210 shares have advanced.