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Benchmark share indices continued to trade weak after the first hour of trade amid profit taking after sharp gains in the previous session with index heavyweights leading the decline.
However, PSU banks were in focus with Bank of Baroda leading the gains after the government launched seven-pronged revamp plan to revive the ailing PSU Banks, including a Rs 20,000-crore capital infusion lifeline.
At 10:40AM, the 30-share Sensex was down 297 points at 27,770 and the 50-share Nifty was down 74 points at 8,444.
In the broader market, the BSE Mid-cap index was trading flat while the Small-cap index was trading with marginal losses.
"If the Nifty sustains above 8480 levels momentum may continue till 8550 and 8580 zones. However, if it fails to hold 8440 levels then profit booking may be seen towards next support of 8380 and 8350 levels. Further, for the Sensex holds above 28000 zones to continue the up move towards 28250 and 28500 zones. However, if it fails to hold 27850 zones then profit taking may drag the index towards 27500 levels," Anand Rathi Securities said in a note.
Movement of rupee and crude coupled with progress of monsoon is likely to dictate the trend on the bourses. Further, the US Federal Reserve would release the minutes of their meeting held on July 28-29 on Wednesday, August 19 which is likely to signal the US central bank's stance on key policy rates.
The rupee weakened further against the US dollar and was down 21 paise at 65.21 to the US dollar after the dollar strengthened against other currencies while demand from importers and weakness in domestic equities also dampened sentiment.
Foreign institutional investors were net buyers to the tune of Rs 404 crore on Friday, as per provisional stock exchange data.
All sectoral indices except Consumer Durbales were trading with losses with Capital goods, IT, Realty and Auto among the top losers.
Bank of Baroda was the top Nifty gainer up 12% after the government appointed Shri P. S. Jayakumar, Managing Director and CEO of VBHC Value Home Pvt. Ltd as head of the bank.
Meanwhile, Canara Bank edged higher and was up over 6% after the government announced the appointment of Rakesh Sharma as chief executive of the bank. Rakesh Sharma currently is the chief of Laxmi Vilas Bank.
HDFC was down 2%. The company plans to sell 9% stake in HDFC Life to its British joint venture partner Standard Life for a little over Rs 1,700 crore.
In the banking space, ICICI Bank and HDFC Bank and Axis Bank were down 0.8-1.3% each while state-owned SBI was the top Sensex gainer up nearly 2%.
Index heavyweights Reliance Industries and Infosys were down 1-1.6% each.
Cipla was down over 4% on profit taking after sharp gains over the last two months ahead of its first quarter earnings surging 27% since June 11, 2015. The company reported an over two-fold jump in its consolidated net profit to Rs 650.61 crore for the quarter ended June 30, 2015 mainly on account of robust sales.
Among other shares, Birla Corporation extended gains and was up 12% after the company announced plans to acquire the Jojobera and Sonadih cement businesses from Lafarge India for an enterprise value of Rs 5,000 crore.
Nitin Fire Protection Industries have surged by nearly 10% to Rs 47.05, extending Friday’s nearly 6% gain on the National Stock Exchange (NSE), after bollywood star Amitabh Bachchan acquired more than one million equity shares of the company through the open market.
