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Markets continued to trade with losses after rebounding form day's lowest levels as investors continued to take profits in cyclicals such as heavyweight banks and capital goods stocks.
Weakness in heavyweight banking shares was instrumental in pulling benchmarks- Sensex and Nifty lower. ICICI Bank, State Bank of India and Axis Bank shed 1-2%. Larsen and Toubro was 1.6% at Rs 1,485.50
A fall in rupee for a second straight day helped beaten down IT shares to recoup some of their losses amid investors' frenzy to dump software stocks in favour of cyclicals such as banks and capital goods on hopes of a turnaround in the economy after pro-business BJP party was elected to power. Infosys, TCS and HCL Technologies managed to churn feeble gains after falling significantly on Monday when rupee touched its 21-month high levels.
On Tuesday, the rupee closed marginally weak at 58.64/dollar, compared with 58.6/dollar on Monday, an 11-month high. The rupee weakened on due to dollar buying by state-run banks, on behalf of RBI. Besides, dollar demand from oil marketing companies was also seen. It is currently trading at 58.72-a-dollar.
A depreciating rupee augurs well for IT companies as over 80% of their revenues come from exports to the US.
At 2:40PM, the 30-share Sensex was down 106 points at 24,269 and the 50-share Nifty was down 34 points at 7,241.
Other Sensex losers include, Sun Pharma, Tata Motors and ONGC.
Among other shares, SKS Microfinance has surged 9% to Rs 281 on back of heavy volumes on the bourses. The stock opened at Rs 258 and touched a low of Rs 241 so far on the Bombay Stock Exchange (BSE).
The broader markets outperformed the benchmark indices, the BSE Mid-cap index was up 0.7% and Small-cap index gained 1.1%.
Market breadth was strong with 1,761 gainers and 953 losers on the BSE
