Markets Trade in Red as Banking Stocks Witness Selling

The Global Markets trade in a mixed territory this morning with a negative bias. U.S. stocks fell, with the Standard & Poor’s 500 Index retreating from the highest level since September 2008, as a stronger dollar weighed on prices of commodities and shares of the companies that produce them. European stocks climbed, extending the benchmark Stoxx Europe 600 Index’s biggest two-day advance in a month, as mining shares rallied in London. Antofagasta Plc and Xstrata Plc led a gauge of basic. This morning Asian stocks fell for the first time in eight days as a stronger dollar drove commodity prices lower and as the U.S. Federal Reserve warned a recovery in the world’s biggest economy doesn’t meet the threshold for scaling back its bond purchase plans. In commodities, Oil fell for a second day in New York as a strengthening dollar prompted traders to sell contracts to secure profits and as U.S. gasoline inventories increased, a sign fuel demand may be slow in catching up to a strengthening economy. Gold climbed, rebounding from the biggest drop in almost two months, as yesterday’s fall spurred investors’ demand for the metal as an alternative asset amid concern that the global economic recovery is not yet assured. Platinum dropped for a third day. Copper dropped from a record and zinc fell the most in a month, leading declines in industrial metals, as the recent rally in raw materials deterred purchases and encouraged investors to sell commodities to lock in gains. Markets opened lower led by weak cues from Asia and Wall Street. Sell-off in banking stocks weighed on the index. The Sensex dropped 105 points, to 20,393 and the Nifty lost 39 points, 6107 in opening trades. Investors cashed out of banks after several banks raised deposit rates in the past week which are expected to hurt banks margin in the near term. The BSE banking index was down 1.1 per cent, ICICI Bank declined 1.7 per cent, HDFC Bank was off 1.1 per cent and State Bank of India Slipped 0.9 per cent.