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Benchmark share indices pared gains amid weak Asian cues after shares in China continued their slide amid fears of a economic growth slowdown.
At 11:20 AM, the 30-share Sensex was down 305 points at 25,434 and the 50-share Nifty was down 101 points at 7,707.
"The early rebound in the markets was on account of shortcovering while volatility was seen ahead of F&O expiry. The sell-off in Chinese stocks has been the epicentre of the stock rout across the globe. The market is in a oversold position and the Nifty seems to find support between 7,785-7,800. However, the opening of European markets could dictate the trend further," says Alex Mathew, Head of Research, Geojit BNP Paribas Financial Services.
The broader markets also shed some of their early gains with the BSE Mid-cap up 0.8% while Small-cap index was down 0.2% each. Market breadth turned weak with 1,294 losers and 791 gainers on the BSE.
The Indian rupee also trimmed early gains and was up 12 paise at 66.52 compared to the previous close on the back of positive trend in equities.
Foreign institutional investors were net sellers in equities to the tune of Rs 5,275
crore on Monday, as per provisional stock exchange data.
GLOBAL MARKETS
Most Asian markets except China and Japan were trading higher after the sharp drop in the previous session. Stocks in China continued to witness selling pressure as investors shunned riskier assets on concerns over sluggish economic growth.Shanghai Composite was down 4.5% while Japan's Nikkei turned choppy and was down 1%. The Hang Seng gained 1.6% and Straits Times was up 1.8%.
SECTORS & STOCKS
Metal, Realty and Bankex which had lost the most in the previous session were the top gainers while Capital Goods, Power and IT indices were the top losers.
Sensex gains were led by index heavyweight Reliance Industries up nearly 2% after the stock had crashed 8.6% in the previous session.
Banking stocks also staged a recovery amid short covering at lower levels. ICICI Bank, SBI, HDFC Bank and Axis Bank were the top gainers.
FMCG shares also firmed up on hopes of rural volume growth. ITC was up 0.4% and HUL was up 1.4%.
Tata Motors which had been falling in the past few session on concerns over weak demand for luxurt car JLR in China was up 1.5%.
Vedanta was up 2.9% on reports that the company has raised Rs 2,000 crore via issue of non-convertible debentures to State Bank of India.
In the defensive sector, pharma shares witnessed buying at lower levels with Sun Pharma, Lupin and Cipla up 0.5-1.7% each.
Other Sensex gainers include, Coal India, M&M and ONGC among others.
Among other shares, Glenmark is trading firm this morning on plans to launch generic Teneligliptin, a new third-generation oral anti-diabetic drug, at a substantially lower price compared to other Gliptins available in India. The stock is quoting at Rs 1155, higher by Rs 31 or 2.7%, on the BSE.
Shares of power generation companies are trading at multi-year lows on the bourses.
According to CRISIL Ratings, power projects worth 46,000 mw are facing viability issues due to lack of long-term buyers for electricity, inadequate fuel supply, and aggressive bidding to win projects and coal blocks. Reliance Power (Rs 33) and Adani Power (Rs 20) are trading at lifetime lows, while state-owned power major NTPC is quoting at Rs 107, its lowest level since July 2006.
