Markets recover from day's low, banks gain

Benchmark indices have trimmed the losses but continue to remain in negative zone weighed down by Asian markets and weakening rupee. However, oil and banking shares are helping the markets to recover from lower levels.

At 11:15 AM, the Sensex was down 69 points at 18,664 and the Nifty was down 21 points at 5,520.

The broader markets are outperforming the benchmark. BSE Midcap and Smallcap indices are up nearly 0.5%

According to Shshank Mehta, Derivatives Strategist, Shah Investor’s Home, “the benchmark indices are in unchartered territory with the trading range also shifting downwards. We want to wait and see Nifty Futures can trade comfortably above 5550 and Bank Nifty above 9740 levels, only then there is any chance of a relief rally with strong resistance seen at 5690-5700 levels in Nifty Futures and 10100 in Bank Nifty Futures. Till then we continue to remain bearish on the markets.”

On the global front, Asian stocks fell to their lowest in a month on Wednesday following a second day of losses on Wall Street, led by a steep decline in the Nikkei as a firmer yen took a toll on Japanese exporters.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7% to its lowest since July 11, and Tokyo’s Nikkei slid to a one-week trough as the dollar slumped to a six-week low against the yen.

Back home, the rupee weakened in trades on Wednesday due to persistent dollar demand by importers. According to currency dealers, there is also dollar demand from foreign banks on behalf of Foreign Institutional Investors (FIIs) who are selling stocks.

At 11:10 am, the rupee was quoting at Rs 61.38 compared with previous close of Rs 60.80. It had opened at Rs 61.25.

On the sectoral front, BSE FMCG index has slumped by nearly 2% followed by counters like Auto, Capital Goods and Healthcare, all declining between 0.5-1%. However, BSE Realty index has surged by nearly 2% after witnessing a sharp slide yesterday. Sectors like PSU, Power and Oil & Gas and Bankex have gained by nearly 1% each.

Tata Motors is the top Sensex loser, down nearly 4% ahead of its April-June (Q1) quarter earnings today.

According to an average estimates, Tata Motors, India’s largest commercial vehicle maker, is likely to report flat net profit of Rs 2,220 crore and net sales of Rs 46,021 crore for the quarter ended June 30, 2013.

Other notable losers are L&T, ITC, Hindalco, Cipla, Maruti Suzuki, Sun Pharma and HDFC.

On the gaining side, Tata Power, Wipro, SBI, BHEL and ONGC have risen between 1-3%.

Oil and Natural Gas Corporation shares gained 0.86% after Barclays and Credit Suisse upgrade the state-run refiner, citing valuations and upside to earnings.

Among other shares, Strides Arcolab has soared nearly 20% to Rs 833 in early noon deals on back of heavy volumes in otherwise weak market on the Bombay Stock Exchange (BSE).

The market breadth in BSE remains marginally negative with 864 shares declining and 809 shares advancing.

SGX Nifty

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