Weakness persists weighed down by financials

Markets continued to exhibit a weak trend in late trades on Monday as the stand-off between US lawmakers over the budget remains unresolved and rising worries of an agreement over increase in borrowing limits weighed on investor sentiment.

At 2:45PM, the 30-share Sensex was down 43 points at 19,872 and the 50-share Nifty was down 12 points at 5,896

European markets also remained weak on Monday, with one benchmark index hitting a four-week low, as US lawmakers had still not reached an agreement on the budget.

Asian shares ended lower. The World Bank reduced its 2013 and 2014 economic growth forecasts for China and most of developing East Asia on Monday, citing slower growth in the world's most populous nation as well as weaker commodity prices that have hurt exports and investments in countries such as Indonesia. The Hang Seng, Nikkei and Straits Times ended down 0.1-1.2% each.

The rupee's weakness continued in afternoon trades due to dollar demand from corporates and importers. Besides that there is dollar buying by state-run banks on behalf of the central bank to boost foreign exchange reserves.

At 2:25 pm the rupee was trading at Rs 61.88 compared with Friday's close of Rs 61.44 per dollar.


BSE Bankex was the top loser among the sectoral indices on the BSE down over 2% followed by Realty, BSE Oil and Gas, Consumer Durables and Auto among others. BSE IT, Healthcare and Metal shares were marginally up.

Bank shares remained weak amid asset quality concerns and worries that credit growth could be under pressure on the back of slowing domestic economy. ICICI Bank, HDFC Bank, HDFC and SBI were down 1.3-2.6% each contributing the most to the Sensex decline.

Other Sensex losers include, index heavyweight Reliance Industries along with L&T, ITC, Tata Motors and Bharti Airtel.

Metal shares were up after encouraging data from China and on hopes of higher net profit growth on sequential basis. Tata Steel and Hindalco were up over 3% each. SAIL and Jindal Steel were up over 2% each.

Coal India was down 3% on reports that the company’s 5% follow-on public offer (FPO) is likely to hit the market by the second week of December. The government, which currently holds a 90% stake in Coal India, intends to sell more than 315 million shares through an offer for sale or OFS through the stock exchanges.

IT majors were up as the rupee weakend against the US dollar. TCS and Infosys were up 0.1-1.1% each.

In the pharma space, Sun Pharma, Dr Reddy's Labs and Cipla were up 0.3-0.4% each.

Meanwhile, the broader markets continue to outperform the benchmark indices. The BSE Mid-cap and Small-cap indices were up 0.3-0.4% each.

Market breadth was marginally up with 1,146 gainers and 1,090 losers on the BSE.