Markets near day lows

Benchmark share indices continue to reel under selling pressure and are trading near day lows after the rupee dropped to its lowest level against the US dollar. Selling pressure in index heavyweights Reliance Industries and Infosys along with ITC and bank shares dragged the indices lower.

At 12:56, Sensex was down 185 points at 16,847 and the 50-share Nifty plummeted 58 points at 5,107. The Sensex and the Nifty touched an intra-day low of 16,827 and 5,097 mark, respectively.

The Indian Rupee hit an all time low of 57.22 to the US dollar.

Meanwhile, the crucial monsoon rains are still expected to be average in 2012, the weather office said on Friday, despite scant rainfall in the first three weeks which had raised concerns over farm output in the major producer and consumer of food stuffs.

The India Meteorological Department said in a statement monsoon rains in 2012 would be 96% of the long-term average overall, down from its April forecast of 99%.

On the global front,  Asian markets are trading weak as data showing U.S. manufacturing grew at its slowest pace in 11 months in June added to concerns about weaker growth in Europe and China, but the index was still headed for best weekly gain in four months. Nikkei, Strait Times, Hang Seng, Taiwan and Kospi have declined between 0.3-2%.

European markets have opened dismal with CAC, DAX and FTSE slipping by almost 1% each.

Back home, all the sectoral indices are trading in negative zone. BSE Metal and Capital Goods indices have plunged by almost 2% each followed by counters like Banks, Power, Oil & Gas, Power, FMCG, Auto and Consumer Durable, all declining by nearly 1% each.

Metal shares have declined following the global commodity sell-off. Hindalco is the top Sensex loser, down over 3% on reports that the government is likely to reject an offer by Vedanta Resources to buy the residual stakes in group firms Hindustan Zinc and Bharat Aluminium Company. Tata Steel, Jindal Steel and Sterlite have slipped between 1-2%.

From the Capital Goods space, L&T and BHEL have plummeted by nearly 2% each.

Banking and financial shares like HDFC, ICICI Bank, SBI and HDFC Bank have plunged between 1-2%.

Index heavyweights RIL and Infosys have dropped between 1-2%.

Other notable losers include Tata Power, ITC, Tata Motors, Bharti Aitel and Sun Pharma.

Among other shares, Welspun Corp has moved higher by 2.4% at Rs 123 after the company said it has won pipes orders worth of Rs 1,738 crore from international and domestic markets.

Cox and Kings has rallied 5% to Rs 129 on reports that the company is in talks with some private equity (PE) funds to sell a minority stake in its UK subsidiary.

The broader indices are also trading in red zone – BSE Midcap and Smallcap indices are down 0.4-9.6%

The market breadth in BSE remains unhealthy with 1,431 declining and 1,007 shares advancing.