MARKET RECOVERS

The Indian equity markets continue trading lower but have recovered some lost ground with buying at lower levels in the mid early noon trade. Investors were trading cautiously ahead of tomorrow's monetary policy review by the central bank. Meanwhile, food articles inflation for week ended September 3 has marginally moderated to 9.47% versus 9.55% (WoW), while fuel group inflation stood at 13.01% versus 12.55% (WoW). Primary articles inflation was at 13.04% versus 13.34% (WoW). Back on street, on sectoral front Realty stocks were trading notably higher with bargain hunters entering the fray after recent big losses. Consumer durables, information technology, PSU and auto stocks were also finding some support. Capital goods, FMCG and bank stocks were trading lower. Oil, metal and pharma stocks were exhibiting a mixed trend. On the global front, most of the Asian markets are trading in green on hopes the leaders in euro-zone will work out a solution to put the economy back on the track. Back home, the market breadth was still favoring the advances; there were 1260 shares on the gaining side against 1042 shares on the losing side while 99 shares remained unchanged.
The BSE Sensex is currently trading at 16,644.27, down by 65.33 points or 0.39%. The index has touched a high and low of 16,843.98 and 16,545.47 respectively. There were 11 stocks advancing against 19 declines on the index.
The broader indices were outperforming the benchmarks; the BSE Mid cap and Small cap indices were up by 0.23% and 0.07% respectively.
The top gaining sectoral indices on the BSE were Realty up by 2.31%, CD up by 1.08%, IT up by 0.45%, PSU and TECk up by 0.15%, while CG down by 0.85%, FMCG down by 0.79%, Bankex down by 0.34%, Health Care (HC) down by 0.22% and Oil & Gas down by 0.09% were the top losers on the index.
The top gainers on the Sensex were DLF up by 2.52%, Jaiprakash Associate up by 2.20%, Tata Motors up by 1.30%, Jindal Steel up by 1.11% and SBI up by 0.72%.
On the flip side, Maruti Suzuki down by 2.80%, L&T down by 1.67%, HUL down by 1.30%, ICICI Bank down by 1.23% and ITC down by 0.88% were the top losers on the Sensex.
Meanwhile, the Reserve Bank of India has finally joined the club of central banks who are selling US dollar to save local currency from a sharp slide as investors are looking for escape to safety at the time of worsening sovereign crisis in the European nations. This is the first time since the Lehman Brothers crisis that the RBI has intervened in the currency market.
This move from RBI is for avoiding any macroeconomic problems as depreciating rupee will increase the price of imported goods which will have adverse impact on the India's current account deficit. On the other hand, Indian exporters would not be able to take advantage of this rupee depreciation as slowdown in Europe and US will reduce the demand for Indian goods. 
On the back of debt default concern in the euro zone and after the downgrading of two largest French banks, Indian rupee depreciated to its two year low touched Rs 48.01 in a day. From the start of this financial year, Indian rupee have depreciated by 6.86%, however, further loss was restricted by the central bank's intervention, which was less than $200 million. This intervention by the RBI gave support to rupee as a result the decline became slower.  This intervention by the RBI indicates that the 48 is not a comfortable level for RBI.
Earlier, RBI had said that it would intervene only if there was persistent volatility in the foreign exchange market and not with an objective to fix an exchange rate.  On the intervention of RBI, Economic Affairs Secretary R Gopalan on September 14 said, "I have a feeling the RBI is following a good policy of non-interference. But once it goes beyond a point, obviously we need to look at how we can. The question still remains in the RBI's domain and they know what right action to take." "I don't think we need to give up our policy for short-term disruption in the market," he added. 

The September 2011 issue of monthly bulletin of RBI showed that the RBI had not bought or sold dollar in the foreign exchange market from November to July.

The S&P CNX Nifty is currently trading at 4,997.60, lower by 14.95 points or 0.30%. The index has touched a high and low of 5,062.35 and 4,967.45 respectively. There were 24 stocks advancing against 26 declines on the index.
The top gainers of the Nifty were DLF up by 2.88%, JP Associate up by 2.05%, Kotak Bank up by 1.84%, GAIL up by 1.84%, Ambuja Cement up by 1.82%.
On the flip side, Maruti down by 2.89%, L&T down by 1.72%, Axis Bank down by 1.58%, Reliance Infra down by 1.46% and HUL down by 1.19% were the major losers on the index.
Most of the Asian equity indices were trading in the green; KLSE Composite was up 0.05%, Nikkei 225 was up 1.66%, Straits Times was up 0.52%, Seoul Composite up 1.19%, Shanghai Composite up 0.03% and Taiwan Weighted up by 2.17%.
On the flip side, Hang Seng down 0.04% and Jakarta Composite was down 1.61%.