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Markets extended its earlier losses as investors continued to take profits after the recent rally that saw bechmarks kiss new highs.
At 12:54pm, the 30-share BSE Sensex was down 138 points at 21,118 levels and the Nifty was off almost 42 points at 6,292 as weakness in heavyweights persists.
Benchmark Sensex was dragged down primarily by heavyweights such as Tata Motors, ICICI Bank, TCS, L&T and RIL.
The rupee, meanwhile, snapped its five-day rising streak against the American currency fell 30paise to 61.34-a-dollar today at the Interbank Foreign Exchange market on fresh dollar demand from importers.
India's sovereign rating may come under pressure if general elections due by May next year end up with a hung parliament or with a government unable to push through reforms, Standard & Poor's said on Wednesday.
Positive trade deficit figures failed to enthuse even as trade deficit was seen narrowing in the month of December on back of decreased oil, gems & jewellery imports.
Snapping a double digit growth trend for the previous four months, merchandise exports rose just 5.86 per cent at $24.61 billion in November year-on-year despite rupee depreciation. Exports were dragged down by slower growth in refinery, pharmaceutical and gems & jewellery products.
Not only exports rose in single digit compared to $23.25 billion in November, 2012, imports also came down compared to each of the previous four months of 2012-13, which speaks volumes about external scenario.
However, the government expressed the hope that exports will see a turnaround in December again as shut down of some refineries due to regular maintenance work in November cast a shadow on their outbound shipments.
Besides, international crude oil prices fell by $5-7 a barrel in November, which took toll on exports as well, commerce secretary S R Rao said while releasing trade numbers today.
Rao further said," cost of diamonds significantly went up. So traders did not buy the commodity." However, he said now the rates have fallen and "we will come back on growth numbers."
The commerce secretary said exports of pharma products also got affected by domestic regulations on prices of essential products.
Trade deficit for November stood at $9.23bn against $10.56bn (M-o-M), down 16.3%, on back of lower imports. Trade deficit figures for November were lowest since March 2011.
The focus of the Reserve Bank of India remains on inflation, Governor Raghuram Rajan said on Wednesday, adding growth seems to be stabilising, although it was too early to call a bottom.
Rajan added the rupee had stabilised "somewhat", but said there was no room for complacency. He also called on the government to continue its efforts to contain the fiscal deficit and said raising subsidised diesel prices to market levels would help.
"Our effort is firmly on controlling inflation," Rajan said during a speech to the Delhi Economic Conclave organised by India's Finance Ministry
FMCG remained the only gainer as investors tried to play it safe in a weak market. Oil & gas and banks were the biggest losers among the BSE sectoral indices, falling over 1.4% each. Banks, realty and auto were the other major losers.
Capital goods stocks such as Pipavav Defence and BHEL were down between 2-5% while L&T is down 1.8 pct .
Broader markets too edged down with small-cap and small-cap indices edging lower by 0.1 - 0.3% on the BSE.
Other shares
Coal India is trading lower by over 2% at Rs 279 in early morning deals on the NSE after the Competition Commission of India (CCI) has imposed a penalty of 1,773 crore over alleged abuse of its monopolistic position.
United Breweries is trading higher by 2% at Rs 793 after the Dutch liquor giant Heineken hiked its stake in the company by over one percentage point through an open market transaction.
Bharti Infratel has surged 7% to Rs 190 on the BSE after Bharti Airtel and Reliance Jio Infocomm announced a comprehensive telecom infrastructure sharing arrangement under which they will share infrastructure created by both parties. Reliance Jio Infocomm is a subsidiary of Reliance Industries Limited (RIL).
Sabero Organic Gujarat has rallied over 8% to Rs 157, extending its past seven days rally, after the Gujarat Pollution Control Board (GPCB) revoked its closure order of the company’s Sarigam unit for a period of 3 months.
