Markets continue to trade near the lows of the day; the Sensex is now down 350 points at 19,959 and Nifty is at 6008 down 112 points.
The weakness on the Indian bourses stems from its Asian peers, with Shanghai Composite skidding nearly 3.5% to 2909 on rate hike concerns in China. The index has slipped over 6% in the past five trading sessions. In Japan, the Nikkei ended lower by 30 points at 9797 and Hang Seng is also lower by 372 points at 23,654.
Back home, analysts expect the markets may continue to fluctuate between gains and losses on raft of global data and valuation concerns. "Markets are in a corrective mode because they are close to peak and valuations are expensive. Poor index of industrial production (IIP) data, rate hike concerns in China and liquidity crunch on back of Power Grid FPO are also weighing on the sentiment, " DD Sharma, Sr. Vice President – Research, Anand Rathi said.
“The reason for the sharp fall is because investors are reacting to the news of tightening and commodity price curb in China. Inflation continues to be a worry for emerging markets in the wake of QE2, since the underlying base metal prices and oil have risen sharply. There are concerns stemming from Europe also,” said Vaibhav Sanghavi, Director (Equities), Ambit Holdings Pvt Ltd.
“Due to a combination of these global events, investors are taking risk off the table from global allocation and just waiting and watching as to how the situation pans out. There is further room for downside for the markets in the near future. However, I continue to remain bullish on the Indian markets in the long term,” he added.
Hindalco leads the Sensex losers charts down more than 4.5% at Rs 213 followed by Sterlite Industries, Tata Motors and Larsen & Toubro down more than 3.3% each. While Bharti Airtel is the only gainer among the Sensex stocks.
All the sectoral indices are trading in the red with Metal being the top loser; the index has shed more than 3.5% or 607 points at 16,501 followed by Capital Goods, Realty, and Auto indices down more than 2% each.
JSW Steel is the top loser among the Metal stocks, the stock has dropped nearly 6% at Rs 1220, followed by Hindalco, Sterlite Industries, Jindal Saw and Tata Steel down more than 3% each.
Market breadth continues to remain extremely negative as 2354 stocks are declining while 575 stocks are advancing.
