Monday Mayhem...Nifty plunges to 3-week low

As if Friday's ferocious slide was not enough, the bulls got yet another jolt at the start of the new week on Monday that too on another heavy volume day. So quite clearly, the bulls continue to be under tremendous pressure as FIIs slowly take some profit off the table after last year's solid gains.



With inflation showing no signs of abating, another rate hike is on the cards soon. Also, the policy stalemate at the Centre is hurting the sentiment big time. There are also a few concerns on the maco-economic front ahead of the release of the IIP data and December's inflation report.

With this, the Indian markets have fallen for the sixth straight day with the NSE Nifty losing more than 400 points and the BSE Sensex over 1400 points.

Coming back to today's trade, index heavyweights like L&T, SBI, HDFC Bank, ICICI Bank and Reliance Industries were badly butchered. The Nifty shed nearly 150 points in a single day.

"Panic seems to have gripped Dalal Street early in the New Year with the key Indian stock indices failing to rise in a single day so far in 2011. Inflation clearly is the biggest danger right now, triggering the fear of further rate hikes by the RBI. Slowdown in overseas inflows coupled with the Government's inability to address some key concerns on governance are also taking a toll on the investors' confidence", says says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The Sensex lost 468 points to close at 19,224 and the NSE Nifty slipped 142 points to close at 5,763.

All the BSE sectoral indices ended in red, the BSE Realty index was the top loser the index lost 3.5%, followed by BSE Capital Goods index was down 3.5% and the BSE Consumer Durables index lost 3.2%.

The broader indices also ended in deep red, the BSE Mid-Cap index was down 2.4% and BSE Small-Cap index was down 2.8%.

The European indices were trading in the red as well, the DAX in Germany was down 0.6%, and the CAC 40 index in France was down 1.4% and FTSE index was down 0.5%.

Outside the frontline indices, the big losers in the broader market were Sintex Ind, United Spirits, IRB Infra and Renuka Sug. On the other hand, gainers included Dabur, Patni, Glaxo and Ultratech Cem.