Markets likely to open gap down & remain weak through the day following

19 Jun 2008 | 10:17
Markets likely to open gap down & remain weak through the day following

The bears took complete control over the Indian Market on Wednesday, as the BSE Sensex closed deep in the red at 15422.3, down by 1.8% over Tuesday's close. The Nifty made a positive start & touched an intra-day high of 4679.8 in the early hour of trade. However it started showing signs of weakness at those higher levels & after remaining volatile for a while, it witnessed a huge sell-off & remained weak through the day, making an intra-day low of 4569.9, before closing at 4582.4, down by 1.5% over Tuesday's close. The NSE cash turnover stood at Rs. 12534 crores in comparison to Rs. 10992 crores on Tuesday. The market breadth was marginally negative on BSE with the advance-decline ratio of close to 0.9:1. Among the sectoral indices FMCG & Autos were the outperformers, which increased by 0.4% & 0.1% respectively. However Realty & Banks underperformed the most, decreasing 3.5% each.

On Wednesday, the US markets witnessed a sharp correction as worries about a weak economy compounded credit sector concerns and drove shares of banks, autos & transportation companies sharply lower. Dow Jones & Nasdaq closed down by 1.1% each. The Indian ADRs ended lower with Infosys, Wipro & Satyam decreasing by 2.8%, 2.3% & 2.5% respectively. ICICI & HDFC Bank decreased by 2.8% & 2.6% respectively, while Tata Communications was down by 4.4%. However, Dr. Reddy's closed up by 3.4%. Among the Latin American markets, the Mexican market decreased by 1%, while Brazilian market decreased by 2%. The light crude oil for July increased by 2% to settle at $136.68 a barrel. Today, the Asian Markets are trading in the red with Nikkei & Hang Seng trading down by 2% & 1.7% respectively, while Shanghai & Singapore Strait indices are trading down by 2.9% & 1.6% respectively.

On Tuesday, the FIIs were net buyers of Rs. 372 crores in the cash markets, while they were net buyers of Rs. 953 crores in the F&O markets. Mutual Funds were net buyers of Rs. 259 crores. As per the provisional figures, FIIs were net sellers of Rs. 435 crores in the cash market on Wednesday, while they were net sellers of Rs. 192 crores in the F&O markets.

Today, we expect the Markets to open gap down & remain weak through the day following negative global cues. Banks, Metals & Realty indices are looking very weak & could fall the most.