Markets remain volatile in narrow range

Benchmark indices are trading in a narrow range amid volatility, with Sensex and Nifty oscillating between negative and positive zone.

At 2:35 PM, the 30-share Sensex was up 48 points at 19,394 and the 50-share Nifty was up 7 points at 5,749.

On the global front, Asian markets continue to trade firm on better-than-expected manufacturing data from China. Shanghai Composite, Hang Seng, Nikkei and Straits Times were up 0.5-2.5% each. Stocks in Europe were trading with marginal gains. The CAC, DAX and FTSE were up 0.3-0.6% each.

Back home, the RBI intervened in the foreign exchange market on Thursday to stop the rupee's slide toward a record low as its defence of the currency, built around draining cash from money markets, came under rising pressure.   

With the Reserve Bank of India struggling to hold the line, investors are sceptical whether the government will take swift, credible action to reduce a gaping current account deficit despite Finance Minister P. Chidambaram's assurances. The rupee was down 43 paise at Rs 60.83 against the US dollar.

Goldman Sachs has downgraded its rating on India citing increased risk of foreign institutional “flow reversal" from equities and sluggish growth outlook as the key reasons. The investment bank has cut its 12-month Nifty target to 6200 and does not rule out further downgrades if the rupee weakens further.

On the sectoral front, BSE Realty and Oil & Gas indices have declined by 3% each followed by counters like PSU, Consumer Durables, Auto, Power, Metal and Capital Goods, all declining between 1-2%. BSE Bankex and FMCG indices have gained by nearly 1% each.

The main losers on the Sensex at this hour include ONGC, BHEL, M&M, Hindalco, RIL, Coal India, Tata Steel and SBI, all declining between 2-5%.

IT majors have gained on the back of a weakening rupee. TCS and Infosys was up 0.3% each.

Other notable gainers are HUL, HDFC Bank, HDFC and JSPL.

In the broader market, BSE Mid-cap index was down 1.4% and BSE Small-cap index was down 1%.

The market breadth in BSE remains weak with 1,379 shares declining and 735 shares advancing.