Oct 10, 2008

Markets likely to continue its downtrend following weak global cues

16 Sep 2008 | 09:52
Markets likely to continue its downtrend following weak global cues

The Indian Market witnessed a huge sell off on Monday after the bankruptcy news of Lehman Brothers & closed deep in the red. The BSE Sensex recovered nearly 400 points from the lows, yet closed down by 3.4% at 13531.3. The Nifty opened gap down & showed further weakness, making an intra-day low of 3955.4. However, it managed to bounce back from those lows during the day before closing at 4072.9, down by 3.7% over Friday’s close. The NSE cash turnover stood at Rs. 11936 crores in comparison to Rs. 12451 crores on Friday. The market breadth was very poor on BSE with the advance-decline ratio of 1:6. All the sectoral indices ended in the red with Realty, IT & TECk falling the most by 7.7%, 35.5% & 4.7% respectively.

On Monday, Wall Street had its worst day since markets reopened after the September 11 attacks as fears about the U.S. financial system's stability surged on Monday after Lehman Brothers filed for bankruptcy & insurer AIG struggled for survival. Dow Jones closed down by 4.4%, while Nasdaq decreased by 3.6%. The Indian ADRs ended sharply lower with Infosys, Wipro & Satyam decreasing by 6.6%, 6.9% & 14.4% respectively. ICICI & HDFC Bank closed down by 12.5% & 10.5% respectively. Among the Latin American markets, the Mexican markets closed down by 3.8%, while Brazilian markets decreased by 7.6%. Among the Metal prices, Aluminium & Copper decreased by 2.3% & 3.3% respectively, while Zinc & Nickel decreased by 5.2% & 5.1% respectively. The light crude oil for October decreased by 5.4% to settle at $95.7 a barrel. Today, the Asian Markets are trading deep in the red with Nikkei & Hang Seng trading down by 5.1% & 5.4% respectively. Shanghai & Singapore Strait are down by 3.3% & 2.2% respectively.

On Friday, the FIIs were net sellers of Rs. 857 crores in the cash markets, while Mutual Funds were net buyers of Rs. 210 crores. As per the provisional figures, FIIs were net sellers of Rs. 763 crores in the cash market on Monday, while they were net sellers of Rs. 1156 crores in the F&O markets.

Today, we expect the Markets to witness another weak session following negative global cues.