Seldom do you see an HDFC falling 5 per cent in trade, like it did today. The shares are a favorite of Foreign Portfolio Investors, where their shareholding is the maximum, as compared to any other stock.

On Tuesday, they dumped shares of HDFC and HDFC Bank both. In fact, HDFC Bank another bluest of blue chips, fell more than 3 per cent in trade. Another institutional favorite, Infosys also fell sharply in trade today. It's a clear trend that is emerging now, that even the bluest of blue chips are falling. Something, we did not see for the last one year.

What the markets are telling us?

Today's 184 points crash in the markets, led by heavyweights is telling us a simple story: Foreign Portfolio Investors are selling. When they sell, there could be basket selling, which could suddenly lead to a collapse in the indices, which we saw today.

So far this year, HDFC, HDFC Bank, Infosys, Reliance Industries and TCS have prevented a virtual collapse in the indices. When these stocks also start falling, you might see indices quickly moving lower. Even today's 10 per cent surge in the Reliance Industries shares could not prevent a crash in the indices.

Markets are headed lower, unless the government moves in swiftly. Last week the two-day rally, was largely on account of hopes that the government would withdraw the surcharge on the super rich. Over the week-end nothing came through, which means one is not sure, if the measure would be withdrawn.

Argentina, Hong Kong: New problem

A sharp plunge in Argentina Peso weighed on currency markets across Asia. The rupee fell 38 paise to hit a low of 71.26 during the session. When an emerging market currency falls, it has a cascading impact on other emerging market currencies. European markets were also weak the Dow Futures pointed to lower openings.

Any recovery in the markets would be short lived, unless FPI flows reverse and global markets continue to remain buoyant. It would be interesting to see how the global markets pan out, with a growing number of problems, including a falling Yuan.