Pre Session - Market is likely to open with gap down opening on worries over European economy Analysis for Jul 24, 2012

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The key domestic benchmarks are likely to open at negative note as Asian peers are trading low amid the rising concerns of European debt, which led the global equity markets for subdued trade. Further, the sentiments further weakened after Moody"s Investors Service cut the outlooks for Germany, the Netherlands and Luxembourg to negative. The MSCI Asia Pacific index fell 0.4 percent at 10:24 AM in Tokyo. Nikkei 225 and Taiwan Weighted was down by 0.42 per cent and 0.59 per cent respectively at 08:48 AM IST.

Renewed worries over Europe"s deepening debt rot took severe toll on global markets as the Sensex witnessed its biggest fall in two months, shedding 281 points today. A falling rupee and policy logjam added fuel to the fire.

The Sensex which was shaken at the start amid weak Asian cues, fell deeper into the red and surrendered the 17K level as markets from Asia to Europe slumped amid fears that record high borrowing costs and debt saddled Spanish regions may force Spain to seek a full-scale sovereign bailout. Worries over a Greek euro exit were back amid concerns that the nation may fail to meet its budget deficit targets necessary to receive emergency aid. Stocks also fell after China warned that economic growth may slow to 7.4 per cent, year on year this quarter.

That was not all; the hopes of FDI in retail took a beating today after Samajwadi Party, Left and Janta Dal opposed the plan as stalled policy reforms dashed optimism of an economic rebound in Asia"s third largest economy, souring sentiment further. A falling rupee also weakened sentiment as the Sensex has a terrible start to the week.

The BSE SENSEX closed at 16,877.35, down by 281.09 points or by 1.64 per cent and the NSE Nifty ended at 5,117.95, down by 87.15 points or by 1.67 per cent. The BSE Sensex touched intraday high of 17,047.73 and intraday low of 16,849.28. The NSE Nifty touched intraday high of 5,164.2 and intraday low of 5,108.1. Meanwhile, the BSE MIDCAP closed at 6,103.25, down by 80.85 points or by 1.31 per cent, while the BSE SMLCAP ended at 6,599.2 down by 76.15 points or by 1.14 per cent.

On Monday, US markets fell due to renewed concerns over sovereign debt crisis in Europe. The stocks fell sharply in early trade but later they recovered more than half as traders lack the catalyst, which can drag the bourses to new lows. Further, the sentiments dampened as Spain banned the three months short selling on all stocks, while Italy did the same for financial and insurance firm. This raised the worries over the economy of the two debt burdened countries. On European front, the European markets tumbled on the back of financials faced the pressure. The companies like Deutsche Bank and Barclays fell by 1.29 per cent and 0.33 per cent respectively.

The Dow Jones Industrial Average ended down 0.79 per cent or 101.11 points at 12,721.46, Nasdaq closed down by 1.20 per cent or 35.15 points at 2,890.15 and the S&P 500 closed lower by 0.89 per cent or 12.14 points at 1,350.52.Crude Oil fell by 4.2 per cent to $88.09 per barrel; however Natural Gas gained 1.3 per cent to close at $3.12 per Mmbtu.

Gold ended the day with 0.4 per cent loss to close at $1577.10 per ounce and Silver closed with 1 per cent gain to close at $27.02 per ounce.

On Monday, the FII"s stood as net buyers in equity and debt both. Gross equity purchased was Rs 1695.60 crore and gross debt purchased stood at Rs 1130.40 crore. Gross equity sold was Rs 1456.40 crore and gross debt sold stood at Rs 344.10 crore. Net investment in equity and debt was Rs 239.20 crore and Rs 786.20 crore respectively.

Top traded Volumes on NSE Nifty – Jaiprakash Associates Ltd. 17395616.00, Tata Motors Ltd. 5700081.00, Sterlite Industries (India) Ltd. 5150811.00, NTPC Ltd. 5130285.00, Maruti Suzuki India Ltd. 4040249.00.

On NSE, total number of shares traded was 4,787.65 lakhs with a total turnover of Rs 7,783.35 crore.

In the NSE F&O segment, total number of contracts traded in index futures was 4,69,297 with a total turnover of Rs 11,575.19 crore and total number of contracts traded in stock futures stood at 7,50,963 with a total turnover of Rs 20,116.47 crore. Total number of contracts traded in index options was 43,53,317 with a total turnover of Rs 1,13,341.94 crore and total number of contracts traded in stock options was 2,54,592 with a total turnover of Rs 7,517.02 crore.

Story first published: Tuesday, July 24, 2012, 10:20 [IST]
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