Wednesday, 10 August 2011

Markets: Sensex extremely volatile

On Tuesday 9 August 2011, 10:07 AM
Bangalore: Panic selling is back in the markets. Globally, US stocks plunged more than 6 percent, its worst ever fall since 2008. Strong words by US President Obama didn't help either. Investors exited stocks and preferred the yellow metal. Gold hit another all time high for a second consecutive session as equity markets dived on growing fears of a global recession after last week's cut in the United States's credit rating.
Asian stock markets nose dived and the Swiss franc held near a record high, as investors dumped riskier assets in a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States.
Australia's benchmark S&P/ASX-200 index lost 4.5 per cent to 3,806.70. Taiwan's TAIEX dropped 4.9 per cent and New Zealand"s benchmark NZX 50 index shed 3.8 per cent.
Brent crude plunged to a six-month trough below $99 a barrel on Tuesday in a two-session drop of more than $10, after a U.S. credit downgrade echoing a global slowdown.
With such negative sentiment surrounding it,  Sensex continued its bearish trend in the morning. The BSE Sensex opened over 3% lower on Tuesday while the 50-share Nifty index slipped below its psychological level of 5000 in opening trade making it sixth consecutive decline on Dalal Street.
16.00PM: After manic monday it was a terrible Tuesday for the Sensex and Nifty. . Sensex extended its losing streak to the sixth consecutive session on Tuesday, hitting its lowest in more than 14 months, amid a global equities sell off triggered by fears that political leaders are failing to tackle the U.S. and Europe debt crises. Markets continued to fall for most part of the day but recovered by the late afternoon to close 132 down at 16857. Nifty dropped 45 points to close at 5072. Short covering was the major reason behind recovery in today's trade as the market was oversold after substantial fall of 1450 points on the Sensex in six days. IT stocks Infosys and Tata Consultancy were among the biggest losers as the global economic turmoil dented the outlook for the outsourcing business.
15.00PM: Markets haven't recovered much. Global markets are still trading lower by nearly 4 percent. Losses on European bourses widened due to selling in banking and commodity shares. Experts say markets would be keenly following the US Federal Reserve meet on Tuesday. There is some more bad news for the global markets. Buzz is that France's ratings might be downgraded next, after the US. BSE IT index continued to lead the losses, down 4%. Patni Computer was the top loser, down 5%, followed by Wipro and TCS, down over 4% each.

14.00PM: A bad opening to the European markets saw Sensex losing more than 250 points. The benchmark index is currently trading at 16733. Reliance Infra and Tata Steel have lost nearly 7 percent and 6 percent respectively. Largecaps like TCS, Wipro and Infosys were down 3-4%. Reliance Industries and L&T fell 1.5%. About four shares were declining for every one share advancing on the National Stock Exchange.
13.00PM: Looks like market volatility is at all time high. It has erased the gains of the last one hour and is currently down 100 points at 16862. Global markets recovered following a positive opening for the European indices. Shanghai Composite is down marginally at 2,526. Taiwan Weighted was down 0.8% at 7,493. Finance Minister Pranab Mukherjee in a statement said that falling crude prices would help in taming the inflation but he wasn't too optimistic about the current market scenario.
12.20AM: Sensex is gaining some confidence is down just 49 points now and is trading at 16940. Nifty is 22 points lower at 5,096. The rupee is below the Rs 45 level, and is currently trading at 45.17 against the dollar. Auto stocks have been the rulers today with M&M up almost 3%. The IT index is still down 2%. The market mayhem is now forcing the US Fed to take some stern action during its meeting on Tuesday. Experts say that the it won't announce any stimulus. But does US need any stimulus at this point. The critical question is what happened to the bail out packages? Why hasn't the US economy stepped up due to the stimulus that was given to the banks?
11.35AM: Senses has recovered smartly from the days low and is trading 160 points down at 16826. The Finance Ministry in a statement said that there is nothing wrong with the markets. It added that key elements on Indian share market functioning normally. Decline in global crude and commodities prices is likely to benefit Indian economy as it will help in easing stubborn inflation levels.  Benchmarks have shown some resilience by bouncing back. Asian markets have also made some back and the Hong Kong, Shanghai markets have trimmed their losses.Meanwhile was the political move by the US to question the S&P rating unfair? Here is an interesting read for you
10.40AM: Auto stocks are the clear winners for the day. It is actually helping the Sensex revive. Nifty is holding itself at the 5000 levels. Sensex is currently down 266 points and is at 16742. Experts say IT stocks will continue to under perform till there is some more clarity on the US debt situation. Internationally, crude oil (Nymex) prices have slipped below $80 a barrel. No will this encourage the Oil Marketing Companies to reduce the petrol prices? We need to wait and watch. India's gold at the Multi-Commodity Exchange hit record high price of Rs 26,000. So where will the yellow metal go from now? Economists are wondering on this panic selling in global stock markets.
10.00AM: In an interview to television channel Market Guru Rakesh Jhunjhunwala says that sharp rebounds won't be seen till the markets hit the bottom. He added that markets are consolidating but India's growth story will continue in spite of these difficult times. At the Sensex, IT stocks have been battered again today. Front line IT stocks like Wipro and TCS have dropped 5 percent each. Experts believed that Asian markets would be vulnerable to abrupt changes in the global scenario. So technically, it is not the best time to buy and added that Indian markets are expected to fall further. So don't jump into the well yet.

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