Markets Driven Down By Global Dynamics

The Indian markets opened below the 17000 mark today on global worries. Companies in the US have been posting their quarterly results with meagre topline growth, the weakest seen since the third quarter of 2008. This has plunged the economy into worries of an upcoming recession. The barely-attained growth, combined with increasing margins indicating spending cuts and low job market signs have taken a toll on the dollar as well as on the US indices.

Asian markets opened significantly lower today, and have been continually negative since then. Currently, the Hang Seng, Nikkei and Shanghai Composite are trading lower by 2.63%, 1.31% and 1.15% respectively.

The Euro zone's troubles have increased and the region has come into the limelight once again, with ministers agreeing to lend up to 100 billion euros to Spain in order to recapitalise its banks. Spanish bonds have been trading at record high yields, making investors pessimistic. This has ultimately driven the global markets down.

On the Indian front, the Sensex and Nifty were trading more than 1% lower minutes within the opening of the markets. They are currently trading down by 0.93% and 0.95% respectively.

Following on from the closure of Maruti Suzuki’s Manesar plant, the company announced a delay in launching its new models lined up for the festive season due to hindrances in production. It was also said that importing cars or shifting production to its other plants would be improbable. The stock has dropped by more than 5% so far today.

RIL is trading marginally lower by 0.36% because of the poor results announced by the company on Friday, Jul 20. Reliance Communications has also been trading lower by 2.59% today, which is being attributed to unfavourable domestic market conditions, as indicated by the hold on the planned IPO in the Singapore market. The company is also burdened by a debt of approximately USD 7 billion.

On the other hand, Dr. Reddys Laboratories has gained some points after losing out on the back of sub-par results declared on Friday, Jul 20. The scrip is trading 0.73% higher today. Tata Power and TCS are among the other gainers for today’s trading session so far.

The market looks weak overall. There seem to be no signs of improvement over the rest of the day either, in view of the dismal global conditions.