Strong negative cues for Indian markets today from their foreign peers Analysis for Dec 29, 2011

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Strong negative cues for Indian markets today
The Indian markets opened in red today on negative cues from global markets. Today, most of the Asian markets have opened in red on negative global cues from the European and US markets.

The US markets ended in red yesterday as concerns about Europe increased once again after the report that European banks were sitting on record pile of cash which they were unwilling to lend. This has put severe strain on credit growth in the region and may exacerbate the slowdown in Europe.

The European Markets ended in red yesterday in spite of strong demand for Italian bonds in the first round of the current auctions. Market sentiments were depressed because of the news that deposits at the European Central Bank hit a record high EUR452 billion and that the central bank"s balance sheet has expanded to a record EUR2.73 trillion. European banks are choosing to not lend and are instead parking their cash in Central bank deposits.  

On the domestic front also, the Indian markets are unlikely to get major positive cues. The government may find it difficult to get the Lokpal Bill through in the Parliament after the opposition of Trinamool Congress. If the government fails to do so then it will reinforce the perception of its policy paralysis and will further depress market sentiments. 2011 has been the second worst year, after 2008, in the past fourteen years for Indian markets.

On the corporate front shares of UTV Software Communications may see some movement after the announcement of Walt Disney that it will launch an open offer to delist the shares of the company from Indian markets in January.

Yesterday, the BSE SENSEX closed at 15727.85 down by 146.1 points or by 0.92 % and the NSE Nifty ended at 4705.8 down by 44.7 points or by 0.94 %.The BSE MIDCAP closed at 5137.18 down by 55.18 points or by 1.06 %, while the BSE SMLCAP ended at 5586.55 down by 63.47 points or by 1.12 %.The BSE Sensex touched intraday high of 15887.8 and intraday low of 15666.46 The NSE Nifty touched intraday high of 4756.2 and intraday low of 4685.65.

The net investments by FIIs on 28th December, 2011 in Indian capital markets stood at Rs 792.90 crore. The net FII investments were positive yesterday.

The gross purchases by the FIIs in the Indian equity markets were of Rs. 1046.60 crore. The gross sales were of Rs. 682.90 crore. The net investment in the equity markets by FIIs on December 28 th, 2011 stood at Rs 363.70 crore.

The gross purchases by the FIIs in the Indian debt markets were of Rs 1937.60 crore. The gross sales by FIIs were of Rs 1508.40 crore. The net investment by the FIIs in the debt markets stood at Rs 429.20 crore.

Today, most of the Asian markets have opened in red on negative global cues from the European and US markets. At 7.40 A.M. Indian time, the Nikkei 225 was down 61.29 points and was at 8362.33. The Hang Seng was down 162 points and was at 18357.02. The Taiwan weighted was down 17.71 points and was at 7036.65. The Shanghai composite was up by 2.46 points and was at 2172.47.

The US markets ended in red yesterday as concerns about Europe increased once again after the report that European banks were sitting on record pile of cash which they were unwilling to lend. This has put severe strain on credit growth in the region and may exacerbate the slowdown in Europe. The first round of Italian bond auctions saw good demand and this was some positive news for the market participants.

The Nasdaq closed at 2589.98, losing 35.22 points over the previous day"s closing. The Dow Jones Industrial lost 139.94 points and closed at 12151.41. The S & P 500 lost 15.79 points and closed at 1249.64.

The European Markets ended in red yesterday in spite of strong demand for Italian bonds in the first round of the current auctions. Market sentiments were depressed because of the news deposits at the European Central Bank hit a record high EUR452 billion and that the central bank"s balance sheet has expanded to a record EUR2.73 trillion.

European banks are choosing to not lend and are instead parking their cash in Central bank deposits. This has the effect of slowing down credit growth in the region which is accelerating the slowdown of European economies.The DAX lost 118.49 points and closed at 5771.27. The FTSE 100 lost 5.30 points and closed at 5507.40. The CAC was down 32.03 points and closed at 3071.08.

Silver lost 5 % and closed at $ 27.28 per ounce. Crude oil lost 1.9 % to close at $ 99.44 per barrel.

Dion Global Solutions Ltd

Read more about: bse, nse, fii
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