Oct 10, 2008

Markets expected to open gap down initially following weak global cues, but could recover during the day

30 Sep 2008 | 09:52 Markets expected to open gap down initially following weak global cues, but could recover during the day

The bears continued to dominate the Indian Markets on Monday, as the BSE Sensex witnessed another sharp fall to close at 12595.8, down by 3.9% over Friday’s close. The Nifty opened flat, but soon witnessed huge selling pressure. It slipped sharply & remained weak through the day. However it managed to recover from the intra-day low of 3777.3 & closed at 3850.1, down by 3.4% over Friday’s close. The NSE cash turnover stood at Rs. 13120 crores in comparison to Rs. 10500 crores on Friday. The market breadth was largely in the negative on BSE with the advance-decline ratio of 1:7. All the sectoral indices ended in the red, with Banks, Consumer Durables &
IT indices being the major losers, which fell by 6%, 5.7% & 5.5%

The Dow industrials plunged on Monday in their biggest decline ever after U.S. lawmakers unexpectedly rejected a $700 billion financial bailout, spooking investors who fear for the future of global markets and the U.S.
economy. Dow Jones, S&P 500 & Nasdaq decreased by 7%, 9% & 9% respectively.
The Indian ADRs ended sharply lower with Infosys, Wipro & Satyam decreasing by 12.7%, 13.4% & 17.5% respectively. ICICI & HDFC Bank decreased by 12.5% & 16.8% respectively. Tata Communications decreased by 17%. Among the Latin American markets, the Mexican markets decreased by 6.4%, while Brazilian Market closed down by 9.4%. Among the Metal prices, Aluminium & Copper decreased by 2.2% & 4.9% respectively, Zinc & Nickel decreased by 5.7% & 2.9% respectively. The light crude oil for November decreased by 9.8% to settle at $96.37 a barrel. Today, the Asian Markets are trading weak with Nikkei & Hang Seng trading down by 4.7% & 2.7%, while Kospi & Singapore Strait are trading down by 1.9% & 2.3% respectively.

On Friday, the FIIs were net sellers of Rs. 604 crores in the cash markets, while they were net buyers of Rs. 173 crores in the F&O Markets. As per the provisional figures, FIIs were net sellers of Rs. 477 crores in the cash market on Monday, while they were net sellers of Rs. 173 crores in the F&O markets.

Today, we expect the Markets to open gap down initially since the global cues are very negative following the rejection of $700 bn bailout package yesterday by the US lawmakers. However, it could witness intermittent recovery from the lows during the day.