Markets End on a Flat Note

Volatility is the word of the day. Indian markets have erased all the morning gains as European shares reversed direction and concerns of flagging domestic growth weighed on investors mind. The Sensex, after touching a high of 16,766 dropped almost 400 points to a low of 16,374. The index finally ended at 16,467 down by 34 points. Nifty after regaining the 5,000 level in morning trades ended with a loss of six points at 4,941. The markets surged in morning trades as investors took to buying shares in specific sectors. In Asia markets advanced in morning trades on hopes that China will buy the bonds from Italy. However, the positive sentiments faded quickly after a spike in Greek borrowing costs on escalating worries that the nation will default on its debts. European markets were down with CAC declining 2.3 per cent to 2,789. DAX and FTSE slipped as well. Back in India, markets are likely to watch the corporate advance tax figures which are set to come out on Thursday. Friday's RBI credit policy review may also decide on the direction for the markets. The predominant opinion between economists seem to be that the RBI would increase rates one last time in its 18-month-long tightening cycle as inflation pressures continue to remain strong. BSE IT index managed to hold to some gains and ended up 1 per cent at 4,833. BSE market breadth turned neutral. Out of 2,928 stocks traded, 1,394 declined while 1,397 advanced on the BSE.