Markets End on a Negative Note

Markets reeled under pressure for the third straight session due to losses in index heavyweights, and nervousness prevailing in the global markets over disagreement on US debt ceiling. The Nifty opened gap down and touched a low of 5,476 in the morning session tracking weak global cues. Losses in heavyweight Reliance Industries, Infosys and HDFC Bank continued to weigh on the markets. The Nifty closed near day’s low at 5,488, down 59 points and the BSE benchmark, Sensex ended at 18,210, down 223 points. There was risk aversion towards equities on concerns that US may default on debt, if there is no consensus on raising the debt limit before the August 2nd deadline. Japan's Nikkei Stock Average declined 1.5%, South Korea’s Kospi Composite lost 0.8%, Hong Kong’s Hang Seng Index ended on a flat note, at 22,571 and China's Shanghai Composite index slipped 0.5%. Among the front line shares back in India, Reliance Industries slipped 2.7%, HDFC Bank declined 2.8% and Infosys was off 1.7%%, the three index heavyweights dragged the Sensex down by 120 points. Only 6 components on the Sensex ended in the green, of which BHEL gained 1.2%, Hero Honda added 1.1% and Bajaj Auto was up 1.6%. The broader market indices were also trading on a weak note. The BSE mid-cap index and the small-cap index were down 0.9% each. The overall breadth of the market was extremely negative, 1870 stocks declined, while 922 stocks advance.