Markets recovered from their day lows in noon trade on Friday after rate sensitive and select metal shares pared some of their early losses. However, weak cues from Asia, weakening rupee and worries over drought like situation on account of deficient monsoon rains continued to weigh on investor sentiment.
At 1:05PM, the 30-share Sensex was down 105 points at 17,119 after touching an intra-day low of 17,027 and the 50-share Nifty was down 35 points at 5,193.
The India Meteorological Department (IMD), for the first time, officially hinted at a drought-like situation, saying the southwest monsoon over India in 2012 is likely to be deficient at below 90 per cent of the Long Period Average.
The rupee today again breached the 56-mark by losing 31 paise to 56.15 against the dollar in early trade to hit a fresh one-week low, due to strong demand for the American currency from banks and importers. The Indian currency was quoting at Rs 55.96 to the dollar as of now.
Asian shares eased on Friday as the European Central Bank, after inaction from the Federal Reserve, disappointed markets looking for an imminent move to deal with the euro zone debt crisis, spurring risk aversion. The Nikkei ended down 1%. Among others, except for the Shanghai Composite which was up 1% all other indices were trading lower.
Among the sectoral indices, Metal, Capital Goods and rate sensitive sectors were among the top losers down 1-2% each.
Metal shares were trading lower after the metal gauge on the London Metal Exchange, LMEX ended 1.3% lower on Thursday. Tata Steel, Hindalco and Sterlite which were down 3% earlier were down 2.5% each.
Capital goods majors L&T and BHEL also recovered from their day lows and were down 1.8% and 1.2%, respecitvely
Bank shares were down on concerns that lower lending rates would hurt margins going forward. SBI has recently announced cut in home and auto loan rates. SBI was down 1% and ICICI Bank slipped 2% each.
Auto shares were down on concerns of slowdown in sales growth in the wake of rising fuel prices and high interest rates on auto loans. Mahindra & Mahindra was down 1% while Tata Motors was down 2%.
Realty shares were down on concerns of high inventory levels as home buyers are reluctant to purchase new homes because of high realty prices and interest rates on home loans.DLF, HDIL, Sobha Developers, Indiabulls Real Estate were down 1-3% each.
Among other shares, Accelya Kale Solutions has soared 10% to Rs 176, extending its previous day rally on over 30-fold rise in trading volumes, As many as a combined 1.42 million shares have already changed hands on the counter till noon deals, against an average sub 50,000 shares that were traded daily in past two weeks. The stock of mid-cap IT Company has zoomed 32% in past two trading sessions from Rs 133 after reporting over four-fold jump in consolidated net profit at Rs 12.98 crore for the fourth quarter ended June 2012, on the back of higher operational revenues. The mid-cap IT Company had a net profit of Rs 3.10 crore in year ago quarter. The consolidated total income from operations grew 55% at Rs 69.35 crore on year-on-year basis.
Dishman Pharmaceuticals and Chemicals too, surged 9% to Rs 82.50 on the BSE. A combined 3.8 million shares have changed hands on the counter so far, against average around 1.6 million shares that were traded daily in past ten trading days.The stock has surged 30% in past five trading sessions, on reporting an over two-fold increase in consolidated net profit at Rs 38.70 crore for the quarter ended June 30, 2012. The company had posted a net profit of Rs 15.12 crore for the corresponding period in the previous fiscal.
Oracle Financial Services has soared 7% to Rs 2,819, also its historic high, after reporting 80% year-on-year (yoy) jump in consolidated net profit at Rs 368 crore for the quarter ended June 2012.
The market breadth continued to remain weak but has improved slightly with 1,027 gainers and 1,477 losers on the BSE.