Review

It was a sluggish day of trade for the Indian markets, losing about one and half a percent after witnessing a smart move in previous session. The fading optimism about global recovery appeared on the regional stock markets and while some of the Asian markets could not manage a close in green even after a positive start, the domestic markets plunged despite making a valiant effort of recovery in early trade. Once the markets slipped into red in the late morning trade, the mood turned bearish and the buying moderated with blue chips suffering some profit booking after the previous session’s gains. A small spurt was seen once the European markets started in green but that was short lived and benchmarks succumbed to profit taking, once again sliding below their crucial support level of 4900 Nifty and 16400 Sensex. The broader indices however tried hard to support the markets but in latter half they too lost their momentum and lost about over half a percent for the day. Apart from the heavyweights, IT sector witnessed profit booking since beginning and all the top gainers of previous session suffered selling pressure. Auto sector stocks got battered today on concern of slowing demand and all the constituents of the gauge on the BSE ended in red with Tata Motors that has maximum exposure to the European markets losing the most, touching its fresh 52 week low. The selling pressure intensified in last hour and the most defensive sector FMCG too wasn’t spared of it. The banking sector also remained in the laggards list with all its constituents closing in red and the heavy weight SBI touching fresh 52 week low. There were some individual winners otherwise the last hour rout inundated the entire space and the benchmarks reversed all their gains garnered in last two sessions, closing near the lowest points of the day.

On the global front, though the US markets surged most in last two weeks on optimism that Central bankers meeting this weekend in Jackson Hole, Wyoming will bring some cheers to the faltering economic recovery, however the Asian markets made a mixed start and finally ended lower as Moody's Investors Service slashed Japan's credit rating by one-notch to Aa3 citing concerns over growth prospects. Meanwhile, Japan unveiled a $100 billion effort to help companies cope with a surging yen. The European markets though made a flat start but turned firm despite the report that UBS AG will cut 5 percent of its workforce that brings to more than 40,000 the number of jobs cut by European banks in the past month as the region’s worsening sovereign debt crisis crimps trading revenue.