Markets Erase Gains, Nifty Closes Lower By 1%

The Indian markets today traded in a very tight range remaining flat to positive throughout. Whatever minor gains that it could register were erased in the last trading hour and the market slid by around 1% ending the day in the red. A subdued global macroeconomic situation combined with domestic worries led to the Sensex closing lower by 162 points at 18309.37 (down by 0.88%) and the Nifty losing 56.95 points to close the day at 5574.05 (down by 1.01%).

As expected, European indices opened lower and markets there have been increasingly jittery. President Barack Obama is scheduled to meet congressional leaders later today to discuss what needs to be done to avert the fiscal cliff? The anxiety over this resulted in a significantly lower opening in the European markets. The FTSE, DAX and CAC are currently trading lower by 0.49%, 0.74% and 0.51% respectively.

Realty, Banking and Auto were among major losers. There was a massive sell-off in real estate stocks which led to DB Realty, Indiabulls Real Estate and Unitech losing between 5.16% and 6.03%. Banks saw some selling pressure resulting in heavyweights like ICICI Bank and SBI declining by 2.65% and 2.13% respectively. Auto majors too lost grip leading to Maruti Suzuki, Tata Motors and Ashok Leyland depreciating by 1.89%, 2.64% and 2.84% respectively.

Along with equities the Rupee too declined today. The INR dropped by 47 paise against the dollar to reach a level of Rs 55.17/dollar.

Overall, the market mood wasn’t particularly good throughout this past week with global factors exerting a good amount of pressure on them. Next week, we expect markets to take direction based on developments in the US and Europe.