Markets remain volatile in a narrow range

BSE Capital Goods, Realty, PSU, Metal, Auto and Power indices down by 1%

Benchmark indices have erased early losses and have turned extremely choppy with Sensex and Nifty swinging between negative and positive zone. .

Meanwhile, trade deficit jumped in October after having fallen to a two-and-a-half-year low the previous month, as overseas purchases of gold picked up ahead of the festival season, provisional government data showed on Monday.

The deficit for the month stood at $10.56 billion, compared with $6.7 billion in September, the trade ministry said

At 13:15 PM, the 30-share Sensex was down 17 points at 20,649 and the 50-share Nifty was trading at 6,127 down 13 points.

Adds Kunal Bothra, Technical Analyst of LKP Securities, “It was a corrective wave for the markets after creating the fresh year high two weeks back. However, I think 6100 on closing basis is a strong support level for Nifty. If it closes below this level then, I think the trend could face some serious selling pressure. On the resistance end, the 6300 mark is the barrier above which the uptrend could resume once again.”

On the global front, Asian shares fell to a four-week low on Monday as a surprise surge in US jobs growth heightened worries the Federal Reserve will start reducing stimulus as soon as next month -- boosting the dollar against the euro, yen and emerging currencies.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.5%, hitting its lowest since October 11 and extending Friday's 1% drop. Jakarta shares fell 0.8%, Thai stocks lost 1.5% and the Manila bourse dropped 1.7%.

Back home, the rupee breached the 63 per dollar mark in morning trade, tracking the Non-Deliverable Forwards (NDF) market coupled with dollar demand from Oil Marketing Companies (OMCs).

At 13:10 pm, the rupee was trading at 63.22 compared with previous close of 62.48 per dollar. In early trade, the rupee even touched 63.25 per dollar.

On the sectoral front, BSE Capital Goods, Realty, PSU, Metal, Auto and Power indices have declined by 1% each. However, BSE IT index has surged by nearly 1%.

The main losers on the Sensex Hindalco, ONGC, L&T, Tata Motors, Hero Moto and JSPL, all dropping between 1-3%.

Shares of information technology (IT) companies are trading higher in otherwise weak market after the Indian rupee fell past 63 to the US dollar to an over seven-week low in early trade on Monday.

Tata Consultancy Services (TCS), HCL Technologies, Tech Mahindra, Infosys, Wipro and Hexaware Technologies from IT pack are up 1-3% on the Bombay Stock Exchange (BSE).

Among other shares, Dena Bank has dipped 7% to Rs 55.60 after reporting a sharp 55% year-on-year (yoy) drop in net profit at Rs 107 crore for the quarter ended September 30, 2013 (Q2) due to higher provisions for stressed assets. The state-owned bank had profit of Rs 240 crore in a year ago quarter.

The market breadth in BSE remains negative with 1,127 shares declining and 989 shares advancing.