Market May Continue To See Profit Taking

Indian equities fell for the third consecutive day due to sharp fall in the Chinese markets had a cascading effect on Indian stocks with the sensex closing below the 28,000 level for the first time in a month. More profit booking by investors also triggered sell off in the market. BSE Sensex fell below the 28,000 mark, plunging 322.39 points (1.15%) to over one-month closing low of 27,797.01 points. Nifty fell 97.55 points (1.16%) to end below the 8,400 mark at 8,340.70 points.

Globally, The U.S. stock market ended slightly lower on yesterday after gap down opening. The major US indices fell in early trading due to sentiment towards riskier assets has been rattled by China's efforts to ease credit growth and a political crisis in Greece. At the end of the day, the Dow lost 51.28 points to close at 17,801.20. It was down as much as 222 points in early trading. The S&P 500 index closed flat on the day, down 0.49 of a point to 2,059.82. The Nasdaq composite added 25.77 points (0.5%), to 4,766.47.

While the losses in the U.S. were slight, the losses in Europe were far deeper. France's CAC-40 closed down 2.6% and Germany's DAX lost 2.2%. Britain's FTSE 100 shed 2.1%. The Athens stock exchange plunged 13% as investors worried that the country might have to hold early general elections and that a left-wing opposition party would win. The Syriza party wants to cut what Greece owes in bailout money, which could spook investors for years and potentially derail the country's recovery. The Stoxx Europe 600 Index fell 2.33% to 340.48, the worst drop since mid-October, with all of its sectors mired in red, as persistent global growth worries pressured equities.

Asian markets open in red. Japanese stock markets dropped after the yen strengthened amid concern over global growth and Greece’s political outlook. Chinese stocks fluctuated as inflation data missed estimates. Japan’s Topix slid 1.32%. The Hang Seng Index was decline by 0.58% and after tumbling 4.6 percent yesterday. Currently, China's Shanghai index decline by 1.63% today. China’s producer price index dropped 2.7% in November from a year earlier, the National Bureau of Statistics said, compared with the median projection of a 2.4% decline. Consumer prices rose 1.4%, compared with the 1.6% increase in October.

The SGX Nifty is also open in red and currently trading at 34 point (0.41%) below at 8,354. We expect Indian market will remain in pressure. Today Indian market is likely to open in red on back of global cues. All are eye on inflation and factory output numbers which will release on Friday.