Sensex at 3-1/2 month low

Today's major news

Aurobindo Pharma gets USFDA nod for Valacyclovir; the stock closes 2.46% lower

Empower group of ministers on fuel pricing to meet on June 7, 2010

Indirect tax mop up at Rs2.46 lakh crore in FY2010

Click here for more stories

Global signals

European shares extended falls on Tuesday, hitting their lowest level in nine months on concerns over the Euro zone's banking system after the Bank of Spain took over a small savings bank on the weekend. At the time of writing the report, FTSE 100 was trading 2.88% lower.

All the major Asian indices closed in the negative territory as Nikkei (Japan) and Hang Seng (Hong Kong) fall over 3% each. SGX Nifty closed 103 points lower.

The US stock index futures point steep decline on the Wall Street on Tuesday. Investors will keep an eye on consumer confidence data and housing price index for May.

Indian indices

Yesterday's rally in the domestic market had regained confidence among investors. Hopes of follow-through rally took a pause as the Indian indices witnessed another major beating today. It seemed that bears had a firm control on the markets across the globe, as the worries over the European crisis still remains.

Spain's central bank takeover of regional savings bank Cajasur over the weekend reinforced investor anxieties and the International Monetary Fund's (IMF) appeal to the Spanish government on Monday (May 24, 2010) to implement far-reaching reforms compounded fears that the economic woes of the heavily-indebted Euro zone country might be worsening. This led European stocks to hit nine-months low in today's trade

There was no respite for the global markets, even today, as it continued to bleed. As if this was not enough, the North Korean leader Kim Jong-il's statement that the country may have to go to war in case of an attack by the South muddied the troubled waters further. As a result, the bourses across the Asia lost around 3% each.

With no exception, domestic indices follows its global peers and tumbled in today's trade to hit the 3-1/2-months low that led the Sensex and Nifty to breach the psychological levels of 16000 and 4800 respectively in an intra-day. Although they managed to close above that level. The Sensex opened on a weak note tracking lower Asian stocks at 16445, making its day's high. The market extended losses as the session progressed and touched the lowest level in 3-1/2 months of 15960 after European stocks tumbled and heavy selling seen across the board with robust volumes. At closing, the Sensex quoted at 16022, 447 points lower. The Nifty shut at 4807 losing 137 points.

Market sentiment

The market breadth was extremely negative as declining stocks outnumbered advancing stocks by over four times. Of the 2,876 stocks traded on the BSE, 2,304 stocks declined, whereas only 484 stocks advanced. Eighty eight stocks remained unchanged.

Sectoral & stock screening

Bears trampled all the sectors with the BSE Metal hitting the most by 5.10% to end at seven-month lows. BSE CD (consumer durables) slipped 4.45% and BSE CG (capital goods) lost 3.09%. However, defensive sector, BSE HC (health care) was the least affected sector, shed 0.89%. The remaining sector indices slipped by around 2-3% each.

Bears hit all the 30-stock Sensex into red except Cipla that ended with marginal gains. Among laggards, Reliance Communications tumbled 6.32%, Hindalco Industries dipped 5.43%, Tata Motors down 4.66%, Sterlite Industries shed 4.46%, Tata Steel declined 4.45% and Larsen & Toubro lost 4.28%.

Viewing volumes

Anil Dhirubhai Ambani Group firm - Reliance Natural Resources saw highest trading with over 0.94 crore shares changing hands on the BSE, followed by India's largest developer - Unitech (0.65 crore shares), wind turbine major - Suzlon Energy (0.43 crore shares), steel maker - Ispat Industries (0.34 crore shares) and industrial finance company - IFCI (0.32 crore shares).