Sensex hovers around 20K, rupee edges closer to 63

Indian stock markets were volatile today while the currency recovered from its early lows.

The Sensex was up 49 points at 19,949.95 after recovering from its day's low of 19,782.78. Nifty too rose above 5900 levels to 5,907 after falling to 5,854.55 at its day's low.

The rupee pared its early losses but was still down at 62.74, off 0.22 percent against the US dollar. At its day's low, the rupee had slipped to 62.91.

Banking stocks continued to see a selloff today. The Bank Nifty was off 0.72 percent at10,138.60, adding to its 4.5 percent decline yesterday. However, some analysts are hopeful on banking stocks after the recent selloff. Aashish Agarwal, ED at CLSA, said the fall in banking stocks offer a good entry point for long-term investors.

Global rating agency Fitch has cut viability ratings of state-run banks Punjab National Bank (PNB) and Bank of Baroda (BoB) by one notch to 'BB+' from 'BBB-' while retaining their long-term issuer default ratings at 'BBB-'. Another rating agency Moody's downgraded its outlook on SBI's financial strength rating to 'negative' from 'stable'.

Moody's also downgraded SBI's unsecured debt rating on par with the sovereign foreign currency bond rating.

Among the Nifty shares, SBI and Bank of Baroda were down over 2.5 percent each while another state-owned lender PNB was down over 1 percent.

Asian share markets were mostly lower on Tuesday while currencies dithered in recent ranges as a dearth of major economic news left investors to fret on the outlook for monetary policy in the United States and Europe.

Taking its cue from a softer Wall Street, MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.9 percent. Shanghai shed 1.2 percent, and Seoul 0.7 percent.

Returning from holiday, Tokyo's Nikkei slipped 0.7 percent in light volume.