Benchmark continue weak trade

The benchmarks opened on a negative note and drifted lower in the late morning session as weak global cues and depreciating rupee hurt the market sentiments. The market is likely to consolidate after correcting further in the near term and take cues from the Reserve Bank of India's policy meet on interest rates.

The rupee continued to weaken against the US dollar. The partially convertible rupee was at 58.27 down 12 paise after it hit a fresh all-time low of 58.35 per dollar. It recorded one of its sharpest intra-day falls to touch a record intra-day low of 58.17 before ending at 58.14, an all-time closing low against the dollar on Monday. In the short term, a weak currency benefits exporters such as the IT and pharma industries. It also benefits companies dealing in globally priced commodities, such as NMDC, Coal India and ONGC. On the other hand, it could have a negative impact in the near term on importers and those with US dollar debts.

Sentiments got dampened due to selling by market participants, triggered by a weakening rupee which plunged to a fresh record low of 58.35 against the dollar in early trade today, heightening inflation worries and a weak trend on Asian bourses following overnight weakness on the US market

On the global front, All the Asian equity indices, barring KLSE Composite, were trading lower in late  morning  deals with Japanese Nikkei declining by about a percentage point after the Bank of Japan (BOJ) kept its policy unchanged.

Back home, the traders were seen selling in Realty, Consumer Durables and Metal sector. In scrip specific development, Metal stocks such as Sterlite Industries, Hindalco Industries, Sail and Tata Steel extended Monday's losses triggered by uninspiring Chinese economic data released over the weekend. China is the world's largest consumer of copper and aluminum. ICICI Bank, Axis Bank HDFC Bank were trading under pressures after the Reserve Bank imposed a fine of Rs 5 crore on Axis Bank, Rs 4.5 crore on HDFC Bank and Rs 1 crore on ICICI Bank for violation of KYC norms and anti-money laundering guidelines after inquiring into charges levelled by an online portal Cobrapost. Auto sector too witnessed selling in late morning trade after Society of Indian Automobile Manufacturers (SIAM) said that the car sales in India fell an annual 12.3% in May.

In scrip specific actions, Elder Pharmaceuticals was locked at 5% upper circuit on reports that the Mumbai-based pharmaceutical firm has been put on the block as it grapples with mounting debts and rising competition. ONGC dropped after the state-run firm has retracted from its earlier statement that ONGC Videsh and Oil India had signed a definitive agreement with Videocon to buy 10% stake in a Mozambique gas field for $2.47 billion.

Meanwhile, the NSE Nifty and BSE Sensex were trading just below their psychological 5,800 and 19,300 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in ratio of 432:1077. The BSE Sensex is currently trading at 19306.81, down by 134.26 points or 0.69% after trading in a range of 19418.74 and 19290.15. There were 10 stocks advancing against 20 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.87% and Small cap index was down by 0.84%.

There were no gaining sectoral indices on the BSE while Realty down by 1.72%, Consumer Durables down by 1.64%, Metal down by 1.36%, Auto down by 1.28% and Bankex down by 1.06% were the top losers on the BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.06%, Wipro up by 0.96%, NTPC up by 0.80% ,Cipla up by 0.74%, Infosys up by 0.67%. On the flip side, Jindal Steel was down by 9.14%, ICICI Bank was down by 3.00%, Bharti Airtel was down by 2.80%, Hindalco Inds was down by 2.44% and Mahindra & Mahindra was down by 2.31% were the top losers on the Sensex.

Meanwhile, As per the Paris-based think tank Organisation for Economic Cooperation and Development (OECD), India's growth prospects continue to remain below trend even as most of the major economies are witnessing moderate improvements.

The Organisation for Economic Cooperation and Development (OECD) is a grouping of mostly rich nations and its assessment is based on Composite Leading Indicators (CLI) that are designed to anticipate turning points in economic activities. India's CLI stood at 97.3 in April, same as in February and March, but lower as compared to January which was at 97.5

Referring to global nations, OECD said that the CLIs for the United Kingdom, Canada, China and Brazil point to growth close to trend rates, while growth seems to be firming up in the United States and Japan. Further, it noted that in the euro area as a whole, the CLI continues to indicate a gain in growth momentum. In Germany, the indicator shows that growth is returning to trend.

India's economic growth slowed down to a decade-low of five percent in the last fiscal from 6.2 percent in the 2010-11 period. In May, the OECD had lowered the India's growth estimate to 5.3 percent for 2013 from 5.9 percent and had also cautioned that structural bottlenecks could further constrain investment and growth potential

The CNX Nifty is currently trading at 5,845.90 down by 32.10 points or 0.55% after trading in a range of 5,868.05 and 5,832.20. There were 17 stocks advancing against 32 declines while 1 stock remained unchanged on the index.

The top gainers of the Nifty were HCL Tech up by 2.00%, Ranbaxy up by 1.74%, Hero MotoCorp up by 1.66%, Kotak Bank up by 1.40% and GAIL up by 1.09%. On the flip side, Jindal Steel down by 3.55%, ICICI Bank down by 2.94%, Bharti Airtel down by 2.80%, IndusInd Bank down by 1.99 % and DLF down by 1.94% were the major losers on the index.

Most of the Asian equity indices were trading in red; Hang Seng declined 226.81 points or 1.05% to 21,388.28, Jakarta Composite tumbled 122.62 points or 2.57% to 4,654.75, Nikkei 225 dropped 118.35 points or 0.88% to 13,395.85, Straits Times crumbled 28.51 points or 0.89% to 3,172.00, KOSPI Composite decreased 12.78 points or 0.66% to 1,919.92 and Taiwan Weighted was down by 27.02 points or 0.33% to 8,133.53.

On the flip side, KLSE Composite was up by 0.97 points or 0.05% to 1,788.77.

Markets in China remained closed for the trade on account of Dragon Boat Festival holiday.