Markets remain weak weighed down by financial shares

Markets continued to remain weak in late morning trades weighed down by profit taking in financials and oil & gas shares. Market participants are also awaiting the Railway Budget 2013-14 which is set to be announced by the Railway Minister, Pawan Kumar Bansal.

At 11:41AM, the Sensex was down 132 points at 19,200 and the Nifty was down 41 points at 5,813.

Asian markets were trading lower after polls showed that the Italian general elections would not result in a clear majority raising worries over re-emergence of the European debt crisis.

Except for the Shanghai Composite which was marginally up, Japan's Nikkei was the top loser down 2.2% followed by Hang Seng, Nikkei, Straits Times and Kospi.

Select financial shares were down after the RBI announced guidelines for new bank licences. As per the new guidelines, entities with a minimum track record of 10 years would be eligible for licence after clearance from sector regulators, enforcement, investigative agencies such as I-T Department, CBI and ED.

HDFC and ICICI Bank were down over 2% each while SBI was down 1%.

In the oil & gas space, Reliance Industries was down 1.6% and exploration major ONGC was down 1.2%. Other Sensex losers include L&T and Tata Motors.

Software shares were up after the Indian rupee weakened against the US dollar.The rupee fell by 19 paise to Rs 54.05 in early trade today at the Interbank Foreign Exchange, due to dollar demand from importers. A weaker rupee helps improve earnings of major software exporters. Infosys and TCS were up nearly 1% each.

In the FMCG space, ITC and Hindustan Unilever were up 1-2% each.

Shares of telecom companies have rallied on the bourses in otherwise weak market on hopes of further lowering of reserve price for the spectrum after the government once again fails to find takers for 1,800-MHz spectrum. Bharti Airtel was up 3.1% and Idea Cellular was up 3.6%. Meanwhile, Bharti Airtel has also launched 4G voice services in Pune where it had earlier offered data services.

Meanwhile, Maruti Suzuki is down 1.9% at Rs 1,416 after the Reserve Bank of India (RBI) said that foreign institutional investor (FII) cannot buy shares of the country's largest car manufacturer as their limit of 24% has been breached. Mahindra & Mahindra and Tata Motors also from the auto pack are down 1.5-2.7% each.

Among other shares, Aanjaneya Lifecare has locked in lower circuit of 20% at Rs 455 on BSE for second day in a row with no buyers on the counter after the pharmaceutical company said that the international investors are cautious due to wide fluctuation in the market price of scrip. The company, which had got the government approval for raising up to Rs 405 crore through foreign currency convertible bonds (FCCB) issue, is in dialogue with international bankers for raising resources for the expansion.

The broader markets continued to remain weak on the back of selling pressure in mid-cap and small-cap shares. Both the Mid-cap and Small-cap shares on the BSE were down 1.3% each.

Market breadth was weak on the BSE with 1,663 losers and 634 gainers.