Markets Extend Losses, Sensex Sheds Over 129 Points

The Indian markets extended their losses in the afternoon session and closed with substantial losses. The Sensex and Nifty both closed down with losses of 0.73%. Some profit booking, lower Asian markets and the weak opening in the European markets kept the mood quite bearish today. There are no major growth triggers expected from the earnings season, and the markets will continue to face some pressure from the global markets.

Earlier, the Asian markets closed on a mixed note on the back of weak cues from the global market, especially from the US, which is showing signs of a weakening economy. The marginally positive news from the Euro zone of aid being extended to the Spanish banks was also weighed down by the weak corporate earnings in the US.

The European markets are still trading down as a slowdown in sales growth at the British group Burberry affected the luxury sector and highlighted the weak macro-economic environment. The result highlighted the growing impact of Europe's sovereign debt crisis on companies, as well as that of the slowdown in China, where the demand for luxury goods has previously managed to offset weak trends in the US and Europe.

Dow Jones Futures is currently trading 26 points or 0.21% up at 12611, indicating a positive sentiment in the US markets.

Among the BSE sectors, all the indices barring Capital Goods closed down in the range of 0.04%-1.22%. Of the major losers, Realty, Auto and Metals were lower by 1.22%, 1.17% and 1.11% respectively. CG was marginally up by 0.34%.

From the Sensex shares, except Infosys (up by 0.29%), L&T (up by 1.20%) and NTPC (up by 0.44%), almost all the other scrips closed negative. Among the major losers, Bharti Airtel, Hindalco, Tata Motors and Wipro were all down by 2% nearly.

In individual stocks, HDFC has slipped by 0.62%. to Rs 678.30 post the results announcement. TVS Motor Company surged 3.13% to Rs 41.15, with the stock extending its two-day rally. This was triggered by the announcement that it is in talks with BMW's motorcycles division for a technology tie-up. Castrol India closed with 1.52% gains at Rs 549 after the announcement of a bonus issue.

The market breadth, which indicates the overall health of the market, remained negative for today. Out of the 3270 stocks traded on the BSE, 1853 declined, 1305 advanced and 112 remained unchanged.

We expect the markets to remain negative for tomorrow as the slowing growth will continue to keep sentiments weak.