After snapping a five-day losing streak in the previous trading session,
the Indian markets on Wednesday resumed their fall. The drop was quite
sharp amid no sign of resolution to the Greek political crisis, which
has triggering a global sell off. Asian stock indices finished sharply
lower, as the undertone continued to be shaky amid concerns that
political instability in Greece could lead to fresh economic turmoil in
the debt-stricken eurozone nation. Fears are also mounting that Greece
may eventually have to leave the currency bloc, further denting the
prospects for global economic growth.
European stock indices too extended losses today on mounting worries
about a possible exit from the euro currency bloc. The FTSE index in the
UK was down 1%, while the DAX index in Germany slipped 0.7%. The CAC
index in France managed to rebound and was trading slightly higher. The
Dow industrials ended near a four-month-low on Tuesday as investors
continue to shun risky assets and are instead taking a refuge in the US
dollar and treasuries.
The BSE Sensex ended at 16,030, losing by 1.8% or 298 points. It had
earlier touched a day’s high of 16,132 and a day’s low of 15,974. It
opened at 16,132.
The NSE Nifty settled at 4858, down by 84 points or 1.7%. It touched a
day’s low of 4,837 and day’s high of 4,882.
Top losers on the Sensex and the Nifty were Tata Motors, Tata Steel,
SAIL, R Infra, JP Associates, Wipro, Jindal Steel, BHEL, Hindalco Inds,
PNB, HDFC, DLF, ICICI Bank, Sun Pharma, Infosys, Maruti Suzuki, Coal
India, Bharti Airtel, NTPC and SBI.
Notable gainers were few on both the indices. They were BPCL, Power Grid
Corp, Cairn India, Bajaj Auto, Kotak Mahindra Bank and Sterlite Inds.
The market breadth was negative on BSE, with 1733 stocks declining and
983 stocks rising.
The sectoral indices were a sea of red today with the Metals index
declining the most, down 2.7%. Auto, Consumer Durables, Capital Goods,
Bankex, Power, PSU, Teck and IT were the other notable laggards among
the sectors.
The broader markets also tumbled with the BSE Mid-Cap index falling 0.8%
and the BSE Small-Cap index ending down 1.1%.
The INDIA VIX on the NSE slipped by 6.4% to close at 23.71. It hit days
high of 24.54. It hit a low of 22.28.
On the domestic front, the Indian Rupee slumped to a new record low of
54.46 before recovering marginally. A suspected intervention by the
Reserve Bank of India (RBI) earlier in the session didn't seem to have
any impact on the Rupee.
The rupee is down 9% since March, the biggest fall among major Asian
currencies. But, traders are still building short positions, betting
that the rupee will fall to a record low of 56 per dollar this year.
"The ‘risk-off’ trade continues unabated amid growing concerns about the
political impasse in Greece. The peripheral European nation’s future in
the euro currency bloc is in doubt as all efforts to form a new
government have failed. Fresh Greek election is imminent, raising fears
of a disorderly exit from the eurozone and a broader meltdown.
India is facing its own set of macro-economic problems, dragging down
the rupee and exacerbating the selling by FIIs. Though valuations may be
compelling, market players are unlikely to fall for it just yet.
Searching for a bottom is futile. Stick to a defensive portfolio and
avoid any adventures," says Amar Ambani, Head of Research, IIFL.
Cairn India, Bank of Baroda and Godrej Consumer advanced after they were
added in the MSCI India index while Suzlon fell as it was removed from
the widely tracked index. Corporation Bank, Page Industries, IL&FS
Transportation, Indiabulls Power, MOIL, Polaris Financial and Suzlon
have been added in MSCI India Small-cap index while 31 stocks, including
Videocon Industries, Shree Cement and SKS Microfinance, have been
deleted.
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