Markets remain weak, index heavyweights drag

Benchmark indices continue to reel under selling pressure weighed down by financials and index heavyweights like RIL and ITC. Weakness in Asian markets has also dampened the sentiments among local investors.

Investors remain cautious ahead of the Infosys quarterly results later this week that will kick start the earnings season for July-September quarter.

At 11:25AM, the 30-share Sensex fell 196 to trade at 19,720 and the 50-share Nifty declined 62 at 5,845 levels.  

According to Navneet Daga, derivative analyst at KR Choksey Securities, “Nifty is evenly posied at this point of time, PCR ratio near 1.09 and huge build up at 5,800 puts and 6,100 calls make a case for range bound trading, with supply pressure near 6,000 levels on nifty futures.”

On the global front, Asian shares, oil prices and the dollar came under pressure on Monday as politicians in Washington showed no signs of making progress to resolve the U.S. budget standoff, while safe-haven gold inched higher.

Democrats and Republicans remained far apart on ending the government shutdown, let alone reaching a deal on the U.S. borrowing limit by October 17 to avoid an unprecedented default.

Back home, the rupee weakened due to dollar demand from corporates. According to currency dealers, state-run banks are seen buying dollars on behalf of the central bank to boost foreign exchange reserves.

At 11:15 am, the rupee was trading at Rs 61.81 compared with Friday's close of Rs 61.44 per dollar.

On the sectoral front, BSE Bankex has plummeted by almost 3% followed by counters like PSU, Oil & Gas, Capital Goods, Realty, FMCG, Power and Auto, all declining by 1%. However, BSE Healthcare and IT indices have gained by nearly 1%.

Banking stocks came under heavy selling pressure today with the banking index – the S&P BSE Bankex slipping over 2.5%.

Among individual stocks, Axis Bank, HDFC Bank, IndusInd Bank, Union Bank of India and Kotak Mahindra Bank slipped over 2% each. However, the biggest loser in this pack was ICICI Bank that lost over 3.5% to Rs 897 levels. The fall comes on the back of news report in The Times of India that that the bank has raised an alarm over loan default by Dabhol pwer plant after being rendered idle due to fuel supply issues.

Coal India has dipped by over 3% on BSE on reports that the company’s 5% follow-on public offer (FPO) is likely to hit the market by the second week of December.

Other notable losers are Bharti Airtel, L&T, RIL, ITC, GAIL, NTPC and Tata Power.

On the gaining side, Tata Steel, JSPL, Hindalco, TCS and Cipla have gained between 1-2%.

Among other shares, Just Dial has tanked nearly 10% to Rs 926 on the Bombay Stock Exchange (BSE), with the stock sliding on profit booking after rallied over 50% in past one month.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices have gained between 0.1-0.3%.

The market breadth in BSE remains marginally negative with 963 shares declining and 857 shares advancing.