Markets Extend Losses, Rupee Slides To 57

After opening on a negative note, the Indian markets have extended their morning losses on the back of negative global cues especially from the European markets, which have opened 1% down. Further, the rupee has depreciated to its all-time low of 57 against the dollar, and this has dented sentiments. On the other hand, the global markets have been playing a strong role in last few days and providing direction to the market. The Sensex and Nifty are down up by 1.25% each.

The Asian markets are mostly trading negative after a spate of bad news hitting the global markets. First, the US Fed disappointed the markets, and now, industrial growth in China has slowed down, as per the latest data released by HSBC. The world's largest consumer of metals saw its factory sector contracting for the 8th straight month in Jun 2012. The major Asian indices, Hang Seng and Nikkei are down by 1.47% and 0.29% respectively.

The European markets continued its negative opening. Investors are disappointed with the Fed's announcement. Further, Moody's downgraded 15 of the world's top banks, cutting the credit ratings by one to three notches, which dented the investors’ appetite. Further, the weak manufacturing data in China and the slowdown in the US manufacturing data has raised concerns over the growth of these economies. All this will add to the woes of the ailing European economy, which is already struggling over the debt crisis. The FTSE, CAC and DAX were down by 1.09%, 1.16% and 1.23% respectively in the opening trade.

Back home, all the BSE sectoral indices are currently trading in the red zone. The major beaten down indices are Metal, CG and Bankex, which have seen losses of 2.19%, 1.51% and 1.42% respectively. All the others are down in the range of 0.20%-1.40%.

Among the individual stocks, Cox and Kings is up by 5.2% to Rs 129.50 as the company is in talks with PE players for a stake sale in its UK unit to repay its debt.

ACC is down by 2.05% at Rs 1228 as the CCI has asked the company to pay a penalty of Rs 1147.6 crore.

The market breadth, which indicates the overall health of the market, turned from positive to negative in the early afternoon trade. On the BSE, 1323 shares declined, 1114 shares advanced and 114 shares were unchanged.

We expect the markets to remain negative for rest of the day on the back of weak global cues and persistent domestic issues.