Markets down on weak global cues

Markets extended loses in late trades on Monday as the US debt ceiling crisis weighed on investor sentiment.

At 2:45PM, the 30-share Sensex was down 220 points at 19,507 and the 50-share Nifty was down 62 points at 5,771.

A political faceoff in the US over its government’s proposal to raise country's debt ceiling is expected to keep stock investors world-wide, including in India, on the edge in the days ahead. Economists and analysts said failure to increase the debt limit by October would result in the US defaulting on its loans, which could potentially damage sentiment in global financial markets.

Meanwhile, the Indian rupee continues to trade weak against the US dollar at Rs 62.67 on concerns over high current account deficit in the first quarter.

In Asia, Nikkei slumped 2% while the Hang Seng and Straits Times were down over 1% each. Howeever, China's Shanghai Composite was up 0.7%.

European shares were also trading lower amid political tension in Italy coupled with the uS debt crisis. The CAC-40, DAX and FTSE-100 were down over 1% each.

The BSE Capital Goods index was the top loser among the sectoral indices down 3.2% followed by Metal, Bankex, Power and Realty indices all down over 2% each.

ITC, Reliance Industries and L&T along with private banks ICICI Bank and HDFC Bank contributed most to the Sensex decline.

Bharti Airtel was down nearly 2%, extending its Friday’s 3% fall, on reports that the telecom regulatory may impose an additional penalty on the company for offering 3G services in the circles where it does not have spectrum.

Other losers include, ONGC, Tata Steel, M&M, and Tata Motors.

Among other shares, MCX was down 5% at Rs 382 after MSCI said the stock will be excluded from the global small-cap indices with effect from October 2, 2013.

Electrosteel Castings was up 5.3% at Rs 12.95 after the company announced that its debt restructuring programme to the tune of Rs 6,181 crore has been approved by CDR EG under the Corporate Debt Restructuring programme with March 1, 2013 as the cut-off date.