Indian equity benchmarks narrowed down early morning losses, helped by a recovery in index heavyweight Reliance Industries (RIL). Shares of the petrochemical major were marginally up at Rs 1,022, after having seen a low of Rs 990.15 earlier in the day.
The 30-share Sensex was down 257 points at 18,181 after falling to 17,920 in the first hour of trading. The 50-share Nifty was down 78 points at 5,453. Asian markets, meanwhile, remained near their lows for the day.
Auto, metal and realty shares continued to be under pressure, though they are slightly up from the lows of the day.
Dealers attributed the strength in RIL shares to expectations that the company could gain from higher petrochemical prices arising out of the closures of petrochemical plants in parts of quake hit Japan. In addition, crude oil prices are expected to rise near term, boosting gross refining margins (GRMs) for oil refiners like RIL.
And while the Nifty has been holding above the 5,400 mark for the past couple of weeks, near term outlook on the market remains hazy.
Market experts say the cost of capital globally could rise in the coming months, partly as a result of the catastrophe in Japan, and this in turn could restrict money flows to riskier assets like emerging market equities.
They feel there is still too much uncertainty over the implications of the earthquake in Japan, on the global economy.