Markets reel under intense selling pressure

 The equity markets have continued to reel under intense selling pressure witnessed in early market trades. Weakness in Asian shares, lower US index futures, data showing slowdown in manufacturing sector in September 2011, data showing continuation of selling by foreign funds last month and likely muted-to-weak Q2 earnings weighed on sentiment. 

The European Counterparts have also opened in the red as amidst fresh concerns over sovereign debt crisis in Europe and fears of a global slowdown.

Back home, according to GoI data India’s August exports rose 44.25 per cent to USD 24.3 billion from a year earlier, while imports for the month rose 41.82 per cent to USD 38.4 billion, leaving a trade deficit of USD 14 billion. Indian exporters enjoyed record growth in the past year and have notched robust growth in recent months, buoyed by demand for the country's cars, petroleum products and precious stones. However, economic turbulence in the United States and Europe, India's top sales destinations, has prompted trade ministry warnings of a slowdown in export growth for the remainder of the fiscal year ending March 2012.

Among the SENSEX all stocks barring Maruti Suzuki and Hero MotoCorp were trading in the red. Metal stocks were among the worst hit on the benchmark index. Jindal Steel was the top loser, down 5.6 per cent to Rs 476. Hindalco was down nearly 5 per cent to Rs 125. Tata Steel and Sterlite Industries were also trading lower by 4 per cent each. Among others, DLF, Wipro, J P Associates, ICICI Bank, Larsen & Toubro, Tata Power, State Bank of India, HDFC Bank, Reliance Industries and HDFC were also trading lower by 2.5 per cent-5 per cent each.

Meanwhile, R-ADAG stocks bucked the trend after witnessing a steep fall in the previous session on reports that the CBI has given a clean chit to a group chairman Anil Ambani, in the structuring of different firms and transfer of funds relating to Swan Telecom in 2G scam.

On the sectoral front, all the indices were in the negative territory. The BSE Realty index was the top loser, down nearly 3.5 per cent or 67 points at 1,695. BSE Metal index slipped 3.6 per cent to 10,604. Bankex, Capital Goods, Consumer Durables, IT, FMCG, Power, PSU and Oil & Gas indices also lost 1.2 per cent-2.8 per cent each in trades thus far.

The market breadth, indicating the overall health of the market, is negative. On BSE, 1843 shares fell and 747 shares rose. A total of 89 shares remained unchanged.

In conclusion, we expect the market to remain negative for the remainder of the day and investors to stay cautious.

Previous Updates

10:30 am: Time to be cautious
08:30 am: Markets expected to remain negative