Growth Concerns, Depreciating Rupee Drag Markets Lower

The Indian markets opened on a negative note today on the back of weak global cues and concerns over the growth slowdown across the globe. The Sensex and Nifty are down by 0.55% each. The rupee has hit an all-time low again at 56.87 against the dollar, and it seems that it will breach the 57 level mark soon.

The Asian markets have opened on a negative note amidst concerns over the growth slowdown. Investors are also concerned about the European debt crisis having a broader ripple effect, with various macro-economic figures reinforcing the same. China’s industrial growth too has slowed down as per the data released yesterday by HSBC, according to which China’s manufacturing PMI fell to 48.1 in Jun 2012 as compared to the final reading of 48.4 for May. This makes Jun the 8th straight month to see a reading below 50, reflecting a contraction. The Hang Seng and Shanghai are down by 0.94% and 1.57% respectively, while Nikkei is up by 0.72%. The markets are looking forward to possible stimulus measures in the US and European economies which will help them find direction.

Among the Sensex shares, BHEL and Cipla are up with 0.42% and 1.41% gains respectively. Other scrips like Bharti Airtel, HDFC, ICICI Bank, RIL, SBI, etc. are trading down nearly by 1.5% each.

The cement stocks are seen under pressure on news that the companies will be fined by the CCI over alleged cartelisation of cement and hiking of prices. ACC is down by 2.05% at Rs 1228, as it has been asked by the CCI to pay a penalty of Rs 1147.6 crore.

The market breadth, which indicates the overall health of the market, is negative as of now. On the BSE, 816 shares have declined and 805 shares have risen. 97 shares are unchanged.

We expect market to remain negative. The European markets could provide some vital cues on the desired direction of the market trend in the late afternoon session.