Slump In Global Markets

It was an arid day for the markets with the Sensex and Nifty trading in a narrow range all day. The markets began lower on the back of weak global cues. Global markets have been rather lacklustre due to the diminishing hopes of the third round of Quantitative Easing (QE3) coming in any time soon. This combined with weak flash PMI figures from China and euro zone released by HSBC and London based Markit Economics took a toll on markets and had the U.S. and Asian markets closing in the red. The Sensex closed lower by 55.08 at 17795.14, down by 0.31% and the Nifty closed lower by 55.08 at 5386.70, down by 0.53%.

Asian markets opened negative today and losses aggravated as the day moved ahead. It ended with the Hang Seng, Nikkei and Shanghai Composite ending lower by 1.25%, 1.17% and 0.99% respectively. European markets opened flat and soon made their way downward, after which they have been swinging drastically not being able to get fixed on direction. German Chancellor Angela Merkel said Germany and France would pressurise Greek Prime Minister Antonis Samaras to turn the Greek economy around in Merkel’s meeting with Samaras who has been looking to buy some time to fix the economy. The meeting between the two leaders is scheduled to be held later today. With this the DAX and CAC are currently trading lower by 0.21% and 0.31%. Meanwhile in the UK, the economy shrank lesser than initially estimated in the second quarter. This happened after there was a revision made in the construction and production output that showed a smaller slump. Data showed that the UK GDP fell by 0.5% as compared to the 0.7% drop estimated, said the Official for National Statistics today. With this, the FTSE has been trading flat, lower by 0.07%.

On the sectoral front, only 3 ended positive, them being FMCG, Healthcare and Auto, with Auto being almost flat having rise by 0.05%. FMCG and Healthcare rose by 0.34% and 0.25% indicating buying in defensives and overall weakness in the market. Of the top losers were Realty, Banking and Power which decline by 2.54%, 1.08% and 0.80% respectively. ONGC and Coal India gained significantly today closing higher by 1.81% and 2.01% respectively. Network18 which sold a 20% stake in Bookmyshow.com said it gained Rs.45 crore from the deal. The company also said it would be carrying out more deals in the future. Network18 shares were up by 3.63% today. Of the top losers were Tata Steel, Jindal Steel and Hindalco depreciating by 2.73%, 2.33% and 1.99% respectively.

The Nifty was holding the 5400 level for 3 days so far but it failed do so because of suppression due to global factors. Markets yesterday ended flat and negative today. Indian markets have been overpowered majorly by global economic dynamics. How the markets would open on Monday would depend on the outcome of the meetings held between euro leaders. However, sentiment remains negative and the outlook seems dodgy.