Sensex recovers to end modestly lower...Nifty holds 4900

There doesn't seem to be any respite from the ongoing pain in the equity markets across the globe as investors remain very nervous about the deteriorating fiscal conditions in the eurozone and dwindling fortunes for the Indian economy.

The Indian equity benchmarks slipped for a seventh straight trading session on Friday amid all-round selling. However, domestic stocks did recover in late trade with the NSE Nifty closing above 4,900. It had earlier dropped under the 4850 mark in the mid afternoon trades. The recovery was led by Oil & Gas and Pharma stocks. The BSE Sensex ended above the 16400 level.



Finally, the Sensex ended at 16,372, down 90 points. It had earlier touched a day's high of 16,396 and a day's low of 16,165. It opened at 17,387. The Nifty closed at 5,905, down 29 points.

Overall, the benchmark indices remained under pressure throughout the session on lingering concerns about the worsening credit crisis in the eurozone and its impact on the global economy.

"The market breadth was weak owing to sustained selloff in the broader indices. Investors have been dumping these shares throughout this week amid worries that these companies won't be able to cope with the weakening economic scenario. Some of these counters were also being hit amid speculation about possible margin calls from brokers," says Amar Ambani .

Technically, the Nifty closed below key Fibonacci support of 4980. Currently, the falling resistance line for the Nifty is placed at 4950. A higher opening above the same would provide relief in the short term as Friday's candlestick turned out to be a Bullish Hammer. The only concern is that the Nifty failed to fill up the falling window of 4920. In a downward spiral falling gaps have high degree of importance

Meanwhile, the rupee fell below the 51 per dollar mark for the first time in nearly 32 months on worries that foreign investors will avoid investing in Indian assets due to deteriorating economic fundamentals.

The rupee is the worst-performing currency in Asia this quarter. It is down 3.5% since Sept. 30 and is within striking distance of record low of 52.18 struck in March 2009. Indian currency has underperformed all other Asian currencies this year. It has slumped 14.2% from its highest point in 2011 hit late in July.

In the international markets, European stocks extended the week’s losses amid ongoing worries over the ability of euro-zone leaders to decisively address the debt crisis. The pan-European Stoxx 600 index fell 0.5% after declining 1.3% on Thursday. The index is on track for a 3.4% weekly loss.

The FTSE in London was down 1% while the MIB index in Italy and Spain's Ibex were flat. The DAX in Germany and the CAC in France were down marginally.

Asian shares tumbled following weak bond auctions in Spain and France yesterday. The Kospi in Seoul was down 2%, while the Shanghai Composite index lost 1.9%.

The Hang Seng and the S&P ASX 200 index in Australia were down 1.7% each. The Nikkei was down 1.2%. The Taiex in Taiwan was down 2% and the Straits Times in Singapore dropped 1.7%.