Markets continue to remain volatile on global concerns

The Indian markets continue to remain volatile, though they have recovered from the day’s low. The volatility in the market is amidst the global news that the European Union’s solution to contain the debt crisis will not change anything fundamentally for the markets, which thus failed to convince the investors. The Sensex and Nifty were both up by 0.4% each.

The European and US markets also tumbled on Monday's trade over concerns on the rising yield of the Italian bonds. Global ratings agency, Fitch, has said that a comprehensive solution has not yet been offered, and predicted a “significant economic downturn” in the region. The agency is expected to cut the ratings for the European countries.

Sensex heavyweights like Reliance Industries and BHEL are trading with gains of 1.33% and 1.63% respectively.

Asian markets are continuing to trade downwards over concerns emanating from the European markets. All the Asian indices were trading in the red zone between 0.5-1.5%.

The European markets opened on a flat note, with gains between -0.03%-0.20%, as investors remained cautious on growing concerns over the ability of the region’s leaders to resolve the crisis. The investors also await a report on retail sales to assess the strength of the U.S. economy.

Most of the BSE sectoral indices are trading positively with marginal gains. Metals, Oil & Gas and IT are leading among the other indices, each gaining between 0.76%-1.84%. Among the losers, CD, CG and Bankex have taken most beating, and are down between 0.34%-1.60% each. All the other indices were trading with marginal gains.
 
Back home, the 30-share Sensex was lead by the gains of Hindalco, Tata Motors, Tata Power, Bajaj Auto, Bharti Airtel, BHEL and Jindal Steel, all of which were prominent gainers between 1.5%-3.5% each. On the other hand, L&T, ONGC and ICICI Bank remained among the losers, shedding between 0.5%-1.5% each.

The market breadth, which indicates the overall health of the market, is weak. On the BSE, 1574 shares fell, 918 shares rose and 116 shares remained unchanged.

Indian investors will be watching eagerly for the inflation numbers (to be declared tomorrow, Dec 14, 2011). We, at DSIJ, expect the markets to remain volatile for the rest of the day, and advise readers to play with caution.