Weakness continues ahead of CAD numbers

After slipping over 200 points in early trades, markets has continued to trade sideways this Monday on back of selling pressure witnessed in banks and capital goods stocks. Investors continue to sit on sidelines ahead of CAD numbers to be released shortly. The current account deficit for the first quarter (June 2013) is pegged to be above 5% of Gross Domestic Product (GDP). Reserve Bank of India will release data for Balance of Payments and CAD in evening. CAD for Q4 (March 2013) was 3.6% of GDP, down from 6.7% in Q3 (December 2012.)

At 11:33AM, the Sensex was lower by 225 points at 19,502 mark and the Nifty slipped by 61 points at 5,772 levels.

Asian stocks fell on Monday on concern the US government is headed for a shutdown amid a budget stalemate.

Key benchmark indices in Japan, Hong Kong, Taiwan, Indonesia, Singapore and South Korea fell 0.6-1.5%. China's Shanghai Composite is up 0.46%.

After opening weak on concerns over higher current account deficit in first quarter, the rupee has recovered to trade around 62.75 to a dollar.

At open, Rupee traded at level just shy of 63 to a dollar mark (at 62.98), according to Bloomberg data.

On Friday, it had closed at 62.49. It strengthened slightly as custodial banks (banks operating for portfolio investors) sold dollars. Some public sector banks also sold greenback, said treasury executives. Rupee may continue to show weakening tendency on higher CAD reading.

Domestically, the key sectoral losers were banks, power, PSU, capital goods while IT and healthcare indices were on the higher side.

The National Stock Exchange (NSE) banking share index Bank Nifty has slipped 243 points or 2.5% at 9,656 points at 1050 hours, declining 13.4% or 1,500 points from 11,149 on September 19. The benchmark index S&P Nifty has dipped 5.8% during the same period.

ICICI Bank, YES Bank, Union Bank of India, Union Bank of India, Canara Bank and Bank of Baroda are down 3-4% at 1100 hours on the NSE.

Bank Nifty had rallied sharply since Raghuram Rajan took over as RBI Governor, rising 29% since September 4th, on announcing measures to support the embattled rupee and unveiling a raft of steps to liberalise financial markets and the banking sector.

The key notable movers included counters such as Lupin which he pharmaceutical company said that it has received approval from the United States Food and Drug Administration (US FDA) to market a generic version of Warner Chilcott Company LLC's 'Ovcon 35' tablets, an oral contraceptive, in the American market.

RJD Chief Lalu Prasad Yadav nad 44 others were held guilty by a CBI court in the fodder scam Monday. He now faces 3-7 years in prison, say reports.

ING Vysya Bank has surged over 7% to Rs 548 in early morning deals on BSE on reports that the promoter is planning to sell its entire stake in the private sector bank.

The broader markets traded lower with mid-caps and small-caps dropping 0.4 per cent on the BSE.

The market breadth was negative. Out of 1,118 stocks traded so far, 689 stocks declined while 460 stocks advanced on the BSE.

Other shares

Shares of Bharti Airtel is trading lower by 4% at Rs 313, extending its Friday’s 3% fall, on reports that the telecom regulatory may impose an additional penalty on the company for offering 3G services in the circles where it does not have spectrum.

Shares of Financial Technologies India (FTIL) and Multi Commodity Exchange of India (MC) are trading lower by over 4% each, extending their Friday’s fall, on reports that the government is set to launch an inquiry against the Financial Technologies Group based on the findings of multiple agencies and regulators investigating National Spot Exchange Ltd (NSEL).