Markets Trade Deep in Red

The Global Markets emanate negative vibes this morning. U.S. stocks slid, giving the Standard & Poor’s 500 Index its biggest two-day drop since March, as concern grew Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. European stocks tumbled the most in seven weeks, led by banks and insurers, as contagion from Greece’s debt crisis threatened to spread to the bigger economies of Italy and Spain. This morning Asian stocks fell, heading for its biggest two-day loss since March 15, after U.S. lawmakers failed to agree on cutting the deficit and concern increased that Greece’s debt crisis may spread to bigger European nations, risking earnings at financial companies. Oil fell for a third in New York as concern that the European debt crisis will spread stoked speculation that fuel demand may falter. Gold climbed to a two-week high, topping $1,550 an ounce, on demand for a store of value amid escalating concerns that Europe’s sovereign-debt woes will widen. The markets have opened with a significant negative gap this morning on the back of weak overseas cues and heavy selling in IT stocks. The Sensex opened at 18,534, and soon touched a low of 18,460 - down 261 points from the previous close. The Sensex is now down 175 points at 18,546. The NSE Nifty has declined 49 points at 5,567. The BSE IT index has plunged almost 4% at 5,861 on the back of a sharp fall in Infosys. The IT major today reported 5.5% drop in sequential net profit at Rs 1,722 crore for the quarter ended June 30, 2011. However, revenue grew marginally by 3.2% to Rs 7,485 crore. The market breadth is fairly negative - out of 1,538 stocks traded so far, 1,011 have declined and 477 have advanced on the BSE. Late today, market participants would be awaiting the June Industrial Output.