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Benchmark indices continue to remain weak weighed down by rate-sensitive sectors after comments from Reserve Bank of India Governor Raghuram Rajan suggested that interest rates may continue to remain high.
At 14:30 PM, the 30-share Sensex was down 232 points at 21,141 and the 50-share Nifty was down 77 points at 6,269.
Adds Parag Doctor, Head-Trading Strategies, LKP Securities, “We expect Nifty to remain range bound between 6,250 and 6,350 ahead of expiry. Traders can go for short strangle Sell 6,200 Put at Rs 16 and 6,400 Call at Rs 9.75, combined stop loss at Rs 36, target 0.”
Meanwhile, Emerging Asian economies will contribute less to global growth in 2014 than earlier expected even as their major trading partners in the West show signs of recovery, a Reuter’s poll showed on Friday.
From China to India, Indonesia, Taiwan and Thailand, over 225 economists polled between January 16-23 have collectively downgraded or left unchanged growth estimates for nine of the top 13 economies in Asia outside Japan.
Foreign institutional investors (FIIs) bought shares worth a net Rs 433.60 crore on Thursday, 23 January 2014, as per provisional data from the stock exchanges.
Coromandel International, Engineers India, Glenmark Pharmaceuticals, Karnataka Bank, Mahindra Lifespace Developers and SKS Microfinance will announce their third quarter earnings today.
On the global front, Asian shares lurched to a 4-1/2 month low on Friday, extending the previous day's weakness as disappointing Chinese manufacturing data raised concerns over the economy, and emerging and commodity currencies took a beating.
Investors sought safety in gold, the yen and highly-rated government bonds, sending the 10-year U.S. Treasury yield to a seven-week low.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.8%, adding to the previous session's 1.3% decline following the Chinese factory activity report.
As the yen strengthened against the dollar, Japan's Nikkei stumbled 1.9% to a one-month closing low in relatively active, extending Thursday's 0.8% drop.
Back home, the rupee is trading lower with local stocks extending losses. The pair is at 62.20/21 after hitting 62.27 intraday. It had closed at 61.9275/9375 on Thursday.
Dealers cite resistance around 62.20 levels and a 62.10-62.30 trading band is likely for rest of the session.
On the sectoral front, BSE Bankex, Capital Goods, Realty, Metal and Consumer Durables indices have plunged by 2% each. However, BSE Oil & Gas and IT indices have gained marginally.
Rate sensitive sectors are reeling under selling pressure after Raghuram Rajan was quoted as saying that inflation was a "destructive disease" that was forcing the bank to keep interest rates high.
The main losers on the Sensex at this hour include Sesa Sterlite, Tata Motors, Tata Steel, BHEL, L&T, ICICI Bank, SBI and Tata Power.
On the gaining side, RIL, TCS, Wipro, NTPC and Coal India have gained between 0.1-1%.
Among other shares, Canara Bank has slipped nearly 6% to Rs 250 as the bank stock turned ex-dividend today, for the interim dividend of Rs 6.50 per share for the year ending 31 March 2014.
Sasken Communication Technologies is down 4.3% on the Bombay Stock Exchange (BSE) currently trading at Rs 172. The stock plunged 14% yesterday after going ex-dividend yesterday.
Mahindra & Mahindra Financials is up 2% after a 6% fall in yesterday’s trade. The stock rebounded as investors took to bottom fishing after third quarter earnings were impacted on account of worsening asset quality and higher provisions impacted profitability.
The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices have plunged by over 1% each.
The market breadth in BSE remains dismal with 1,700 shares declining and 800 shares advancing.
