Weakness to continue

The Sensex corrected more than 2000 points from its all time high and is expected to dip further on concerns of slowdown in US economy. Also the weakness in global equity markets on sliding Chinese equities, unwinding of yen carry trade may put pressure on the domestic market. However, firm Asian indices in morning trades and FII turning net buyers on Friday when market had a sharp fall, may add to market advantage and help the sentiment to turn positive. Among the domestic indices, the Nifty could test higher levels of 3670 and may dip to 3480 on the downside. The Sensex has a likely support at 12344 and may face resistance at 12440.

US indices witnessed choppy trading during intra-day trades and ended on a weak note on Monday amid weakness in global markets and worries about the fallout from the subprime mortgage lending business. While the Dow Jones was down by 64 points at 12050, the Nasdaq ended 13 points lower at 2341.

Indian floats ended largely with losses on the US bourses. Patni computer was the major loser and fell over 6% and HDFC Bank was down around 5% while, Infosys, Satyam, Wipro, Dr Reddy's, Tata Motors, Rediff and VSNL lost over 1-3% each. However, ICICI Bank was up over 1% and MTNL remained unchanged.

While the Nymex light crude oil for April delivery moved down by $1.57 cents at $60.07 a barrel. In the commodity space, the Comex gold for April series tumbled by $4.90 to settle at $639.20 a troy ounce.