Indian markets drift deeper into red; trade lower by about a percent

Initial optimism in the local markets has met with stern resistance as hefty bouts of profit booking has butchered the 30 share benchmark by nearly 450 points in the early afternoon session from the day's high. The psychological 5,900 and 19,650 levels proved as a stiff resistance for the benchmarks as the indices failed to hold on to those levels and immense selling pressure in technology bellwethers like TCS, Infosys and Wipro pummeled them by close to a percent point. While profit booking in banking heavyweight stock like HDFC Bank ahead of its quarterly earnings announcement later in the day has led to position squaring in peers like SBI and ICICI Bank. On the global front, majority of Asian markets reeled under the heavy selling pressure while pessimistic start for the European indices too added to the pressure. On the sectoral front, most indices languished in the negative terrain with the information technology index bearing the maximum brunt and deposing 2.01% followed by the high beta real estate pocket which sank by 1.63% as majors like DLF and JP Associates fell by 2.16% and 0.50% respectively. However, the gains in heavyweights like Reliance Industries and Hero Honda helped the benchmarks to some extent. Meanwhile, the broader markets showed some resilience as the midcap index slipped by 0.26% while the smallcap index added 0.33%. The market breadth on the BSE was strongly in favor of declines in the ratio of 1311:1427 while 100 scrips remained unchanged. Moreover, the market volumes remained very high as it has already crossed the volumes of Rs 1 lakh crore mark.

The BSE Sensex fell 166.29 points or 0.86% at 19,220.53. The index touched a high and a low of 19,649.22 and 19,210.82 respectively.

The BSE Mid-cap index fell by 0.26% and Small-cap index added 0.33%.

On the BSE sectoral front, CD up 0.33%, Oil and Gas up 0.30% and Auto 0.24%, remained the only gainers.

On the flip side, IT down 2.01%, Realty down 1.63%, Teck down 1.55%, CG down 0.88% and Metal down 0.88% were the major laggards in the BSE sectoral space.

The top gainers on the Sensex were Hero Honda up 4.25%, Bajaj Auto up 1.25%, HUL up 1.07%, Sterlite up 1.02% and Reliance Infra up 1.01%.

On the flip side TCS down 2.65%, DLF down 2.16%, Infosys down 2.13%, Cipla down 1.94% and Jindal Steel down 1.63% were the major losers on the index.

Meanwhile, in a move aimed at preventing a re-occurring of global financial crisis, the International Monetary Fund (IMF) will begin monitoring seven large economies of the world including India. The surveillance system that these economies will face aims at highlighting and rectifying flaws before they reach unsustainable levels.

The new system that was outlined in a joint statement following the IMF's Summer Meeting in which the G-20 finance officials had met would be empowered to take corrective actions when global imbalances in such areas as foreign trade or government debt rise to excessive levels or there are fears that a large bubble could bust in a big economy which could have global implications.

Analysts see the agreement as a significant achievement which will help maintain the momentum of global co-ordination in matters of economy. It was the co-ordinated action of large economies following the financial crisis of 2008 that helped the world economy stand back on its feet so quickly. However, apprehensions have been expressed that as the recovery continues at different pace in different economies, varying action by policy makers can again lead to nationalistic polices disconnected from an increasingly globalised world.

The new agreement is therefore aimed at ensuring that large economies continue to interact with each other at policy level and their actions remain under scrutiny of each other too. In the beginning the monitoring process would focus on seven of the world's largest economies but would be eventually broadened to include all G-20 members. Although officially the names of seven economies have not been mentioned, these are widely believed to include the United States, China, Japan, Germany, France, Britain and India. 

The S&P CNX Nifty plunged 54.55 points or 0.94% at 5,770.00. The index touched high and low of 5,897.90 and 5,769.10, respectively.

The top gainers on the Nifty were Hero Honda up 4%, HUL up 1.51%, Bajaj Auto up 1.01%, ONGC up 0.65% and Sterlite up 0.52%.

On the other hand, TCS down 2.97%, DLF down 2.82%, Infosys down 2.42%, HCL down 2.26% and Sesa Goa down 2.25% were the losers on the index.

On the global front, Shanghai Composite was up 0.09% and KLSE Composite was up 0.31%. On the other hand, Hang Seng was down 0.97%, Jakarta Composite was down 0.26%, Nikkei 225 was down 0.36%, Straits Times was down 0.30%, Seoul Composite was down 0.13% and Taiwan Weighted was down 0.04%.

The European markets are trading on a negative note as the France's CAC 40 slipped 0.62%, Germany's DAX plunged 1.01% and Britain's FTSE 100 declined 0.65%.

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