Market May Fall On Profit Taking

Indian equities worst drop in eight weeks with benchmark Sensex declining over 339 points and nifty fall by 100 points on yesterday on profit-booking in select bluechips like private sector lenders HDFC Bank and ICICI Bank lost about one and half per cent each, in metal Sesa Sterlite, Hindalco and Tata Steel slipped by 2-3.6% on reports of weak trade data of China. Shares of heavyweight Infosys fell by 4.88% as families of four of Infosys founders have reportedly sold 3.2 crore shares in the company. Its peers TCS and Wipro also witnessed selling pressure. Meanwhile, defensive counter FMCG ended higher by nearly 1%.

Sensex ended down 339 points (1.19%) at 28,119 and Nifty closed 100 points (1.17%) lower at 8,438. The Sensex and the Nifty touched an intra-day low of 28,097 mark and 8,432, respectively. This was also its worst drop since October 16 (fall of 115.80 points).

Globally, The U.S. stock market posted its biggest daily percentage drop in nearly seven weeks on yesterday as oil's slump to a five-year low caused a selloff in energy shares. Downbeat economic reports from China, Japan and Europe also dented sentiment. The S&P 500 fell 0.73% to 2,060.31, its worst loss in almost two months. The Dow Jones Industrial Average slid 106.31 points, (0.59%) to 17,852.48. The Nasdaq composite went down 40.06 points (0.84%) to 4,740.69.

WTI crude ended at USD 63.05 a barrel, down 4.3%, its lowest close since July 2009. Brent crude sank 4% to USD 66.10, its lowest since September 2009. Since peaking at about USD 107 a barrel in June, WTI crude has dropped more than 40%.

European stock markets also dropped as comments by European Central Bank President Mario Draghi continued to weigh, with London's benchmark FTSE 100 index sliding 0.83% to stand at 6,686.68. Frankfurt's DAX 30 dropped 0.59% to 10,027.18 points and the CAC 40 in Paris lost 0.79% to 4,384.58 compared with Friday's close.

Asian markets open in red. Japanese stocks fell after the yen strengthened and oil prices dropped to a five-year low, weighing on exporters and energy shares. Currently, the Topix index declined 0.5% to 1,439.90, falling from a seven-year high and headed for its first loss in December. The Nikkei 225 Stock Average lost 0.5% to 17,850.24. The Hang Seng index declined 1.06% in early trading, while China's Shanghai index dropped 0.2%.

The SGX Nifty is also open in red and currently trading at 28 point above at 8,454. We expect Indian market will continue to consolidate. Today Indian market is likely to open in red on back of global cues.