Markets crash below crucial level

Indian markets have crashed and extended their morning losses, with both the bourses down more than 3%, tracking weakness in the other Asian and European markets.

The Nifty has breached the crucial 4700 mark today on the back of concerns about the European credit crisis and choppiness in the rupee. Sensex heavyweights like Reliance Industries and BHEL have extended the morning losses by falling 3.78% and 3.90% respectively.

The Asian stock markets also dropped sharply, as fresh jitters over a potential downgrade of France's sovereign credit rating and a contraction in manufacturing activity in China sent the Euro skidding. Data from China showing contracted manufacturing activity in November 2011 added to the gloom over Europe.

European markets also opened downward, with losses between 1%-2% each. The region's debt crisis continues to undermine investor sentiment. Investor confidence also took a hit after China and Singapore showed a bleak picture of the global economy.

Back home, all the BSE sectoral indices are trading in the red zone. Oil & Gas, Bankex and Metals took most of the beating, down by nearly 3% each. Other indices, viz. IT, Power, Metals, PSU, Auto, CG and FMCG are also down by 2.5% each. CD, Realty and Pharma were trading down between 0.48-1.23%.

HDFC Bank, Bharti Airtel, Jindal Steel and Jaiprakash Asso. are prominent losers among the 30 share Sensex, and crashed by 4%-5% each. In fact, HDFC Bank was the biggest loser among the Sensex stocks, and was down by 5.05%, tracking the weakness of its American Depository Receipt on the New York Stock Exchange on Tuesday, Nov 22.

Among individual stocks, DB Realty (up 20%), Reliance Communications (up 2.5%) and Unitech rallied sharply after the Supreme Court granted bail to 5 corporates accused in the 2G case

The market breadth, which indicates the overall health of the market, is very weak. On the BSE, 2101 shares fell and 545 shares rose. 84 shares remained unchanged.

In conclusion, we expect the markets to remain negative for the day. European markets will also provide some vital cues on the desired direction of the market trend in the late afternoon session.