Indian Markets Open More Than 100 Points Lower

The Indian markets opened significantly lower today on account of a weak global backdrop and the recent domestic numbers indicative of a not-so-favourable situation. The markets worldwide have been getting increasingly jittery post the U.S. presidential election outcome. Investors have turned their attention towards the fiscal cliff set to seep in from January 01, 2013, should the U.S. government fail to reach a consensual long-term plan to curb the increasing fiscal deficit. This would take a heavy toll on the global markets as spending cuts and raised taxes would result in an over USD 600 billion impact. The U.S. markets have been trading lower over the week and have been weighing down most of the global bourses as well.

Moreover, the European opening is likely to impact the Indian markets as well later today as the Euro zone prepares to release a bunch of data that would be indicative of the overall health of the economy. This data includes the GDP numbers for France, Germany, Spain, Italy and the Euro zone, the ECB monthly report, Euro zone CPI and retail sales in the UK. With the overall direction being downward in the Indian markets, the trend is likely to be further moulded by the European opening.

At the moment, the Sensex is trading lower by 105.23 points at 18,513.64, down by 0.57 per cent and the Nifty is trading lower by 35.20 points at 5,631.75, down by 0.62 per cent. The Asian markets too are trading lower due to global pressures. Nikkei however is trading more than 1 per cent higher due to the strength in yen and due to speculation over the likelihood of the Japanese opposition leader becoming the prime minister in the upcoming elections. Considering his aggressive stance on the fiscal and monetary policy fronts, the markets have been reacting positively to this probable change.

Domestically, the overall sentiment is negative with selling in mid-caps and small-caps along with the broader indices. The BSE Midcap and BSE Smallcap indices are trading lower by 0.29 per cent and 0.16 per cent respectively. Of the 13 sectoral indices, only three are currently trading in the green. The highest gains are seen in realty, consumer durables and capital goods which are trading higher by 0.70 per cent, 0.65 per cent and 0.31 per cent respectively. Telecom stocks too have been trading significantly higher, providing some upward support to the markets. Bharti Airtel and Idea Cellular which now look attractive to investors as the regulatory hang on the sector seems to come to an end are trading higher by 3.63 per cent and 3.04 per cent respectively.

Amongst the top losers is GMR Infra which has lost 3.44 per cent so far. This has been on account of a subdued result announcement by the company wherein the net loss of GMR Infra widened by about three times. The debt-ridden company has been accumulating losses over time and investors have been concerned over the financial situation of the company. Over the rest of the day, we expect this negative trend to continue due to the overall weakness seen in the global markets and due to a subdued mood caused by domestic factors after the release of data on the IIP and CPI.