Markets Down Over 1%, Tata Motors Down 7%

Amid high volatility, the uncertain political situation in Greece, the falling rupee and the overall slowed down economic growth, the Indian equity markets crashed by over 1% again today. For the first time in this calender year (after the rally), the Sensex came down below the 16000 mark. The markets were down heavily by over 1.8% for most of the day. By the close of business, there was some recovery, but it was not good enough to lift the investors' sentiments.

The rupee has been busy depreciating against all major currencies. Today would be one day that would be recorded in the annals of history. The rupee touched its earlier lows, and at the time of writing this report, it stood at the 54.41/dollar mark, which is a historic low. This will have a debilitating impact, as oil imports would be even more expensive. Earlier, investment bank UBS had said in its report that the falling rupee may touch the 56/dollar mark. Looking at the rate of the fall, the possibility of the same seems more realistic.

As the crisis in the Greece worsens, markets across the globe have started sinking. The European stocks saw very heavy selling pressure today, and were seen dropping about 1% by mid day. The peer Asian indices were also seen taking the impact of the Greek developments, and they tumbled heavily. With such a worrisome picture in Europe, the recovery in the markets seems very fragile. In fact, Bank of America-Merrill Lynch has said that the Sensex may touch the levels of 15000, which give a very pessimistic picture of the market.

Back to the domestic markets, all the sectoral indices closed negative today. The Oil & Gas index was seen making intraday profits, but could not withstand the selling pressure and closed in losses. Metals were the top losers, followed by the Auto index.

Among the 30 Sensex stocks, only Sterlite Industries and Bajaj Auto finally closed positive today, and the other 28 were in the red zone. Tata Motors plunged 7.34% as the company reported flat global sales. Since it has significant exposure in Europe, its sales may be further impacted in the wake of the Euro zone crisis. Another Tata group stock, Tata Steel, was also down by 3.89%. Power equipment major BHEL was again under selling pressure, and the stock is now trading at Rs 208. The stock also touched its 52-week low today. Banking stocks such as HDFC, HDFC Bank, ICICI Bank and SBI, as well as Realty major DLF were also down.

The shares of Aditya Birla Nuvo were down by 6% as the company reported a 42% decline in its net profit. Those of JSW Steel also declined as the company reported lower profits. Kingfisher Airlines tanked 2.64% and touched a new low. The other Vijay Mallya-led company, United Spirits, also lost 4.45%.

The market sentiment was extremely negative today. 63% stocks of the total traded stocks declined in value, 33% advanced and the remaining 4% remained unchanged.

Inflation and interest rates are biting into the growth of the country. With the renewed Eurozone troubles, the markets may remain lower this week.