Markets End on a Negative Note

Fears of slowdown in growth after the latest 50 basis points rate hike continued to weigh on the investor sentiment. The Sensex dropped to a low of 18,359, thanks to a partial recovery - the index ended at 18,432 - down 86 points.  In the process, the Sensex has declined 2.3% (439 points) in the last two trading days. The NSE Nifty ended at 5,546 - down 28 points, a day ahead of the derivatives expiry. Rate sensitive stocks - mainly the banking and realty were under selling pressure for the second straight day. Power and capital goods stocks too witnessed considerable weakness today. Meanwhile, global markets were mixed as the US remained without any significant step to prevent default before the August 2 deadline. After the said deadline, the US treasury would not be able to meet the debt obligations. Markets in Asia took a beating, with Hang Seng and Nikkei ending in red. Shanghai Composite, however, added 0.7% at 2,723. Realty stocks edged down on worries that a higher interest rate would negatively impact demand for houses as well as commercial places. BSE realty index was the most hit among the rate sensitive sectors and was down nearly 1% at 2,124. Market breadth is negative with 1345 advances as against 1498 declines.