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Markets weak on Pak coup; Sensex opens 100 points down, recovers to 5033; Nifty at 1480; rupee at 43.49 Vs $

The Bombay Stock Exchange opened on a weak note on Wednesday morning. The Sensex opened lower, down 100 points or 2.5 per cent at 4957.64 points over Tuesday's close, due to fears of political instability in the subcontinent arising out of the coup in Pakistan.

Pivotals displayed a negative trend. Infosys Technologies was down by Rs 315, NIIT was down by Rs 100.

However, the benchmark index recovered quickly as players began buying, arresting the initial losses. At 14.30 hours IST, the Sensex was at 5060, up three points from Tuesday's close. The Sensex finally closed at 5032.99, down 24 points or 0.47 per cent.

At the National Stock Exchange, the S&P CNX Nifty closed at 1496.55, up almost ten points or 0.67 per cent over Tuesday's close of 1486.55.

At the inter-bank foreign exchange market, the Indian rupee slipped to 43.54 to a US dollar in early deals, after opening at 43.43. Later, the Indian unit recovered to 43.49, down six paise from Tuesday's close of 43.43. Banks and corporates were said to be selling dollars to cover short positions of Tuesday. But dealers said the second phase of reforms that the new government has sworn by is expected to improve capital flows. The rupee closed steadt at 43.43.

The Indian call money market opened on a firm note on Wednesday.

Dealers said they expected rates to ease without declining drastically. They expect rates to be above 10.5 per cent. Liquidity, one dealer said, remains tight.

Overnight call money rates were quoted at 11.25-11.75 per cent after they opened at 11.0-11.25. Call rates closed at 11.0-11.25 per cent on Tuesday.

Dealers said a few banks had adverse positions on Tuesday afternoon. But for this factor, rates would have closed below 11 per cent.

No major inflows or outflows are foreseen, dealers said.

Bond prices are expected to be slightly cautious due to the developments in Pakistan.

Dealers say the turmoil in the currency market could affect bonds, leading to some selling.

There are expectations in the market that the Reserve Bank of India would ease liquidity in its mid-term review of the monetary policy on October 29.

American Depository Receipts or ADRs of Indian companies declined on Tuesday on news of coup in Pakistan. Two Indian ADRs, that of Infosys and ICICI, fell almost instantly on receipt of the news.

However, they recovered later amid heavy trading.

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