Markets wilted under selling pressure again tracking sell-off across Europe ahead of the US Federal Reserve policy meet.
It was a very volatile day for the markets; the Nifty index opened in the red and touched a low of 4,956 in opening trades, and recovered smartly by 221 points from the day’s low to touch a high of 5,167. India’s volatility index touched an all time high of 34.31 as global uncertainty weighed on investor’s mind. However, in noon trades the Nifty slipped back into the red, down 68 points, at 5,049 and the Sensex declined 228 points, at 16,761.
Losses on European bourses widened due to selling in banking and commodity shares ahead of the US Federal Reserve Policy expected later today. In Europe the Italian and Spanish bonds declined further after the European Central Bank purchased the bonds for the first time yesterday to reign in high yields. Analysts are concerned whether people will be able to lend to Italy and Spain again. FTSE 100 and DAX declined over 4%, while CAC 40 plunged 3%.
Asian markets recovered in late trades. Japan’s Nikkei Stock Average closed down 1.7%, South Korea’s Kospi Composite slipped 3.6%, Hong Kong’s Hang Seng Index plummeted 5.7% and Shanghai Composite Index ended flat.
Back in India, BSE IT index continued to lead the losses, down 4%. Patni Computer was the top loser, down 5%, followed by Wipro and TCS, down over 4% each.
BSE Metal shares were also trading lower, down 2.4%. Tata Steel was off over 5%, NALCO declined 4.8% and Coal India was off 3.4%.
From the broader market, the BSE midcap and the smallcap indices were down almost 2% each.
Market breadth was extremely negative, 2142 stocks declined for every 681 stocks which advanced.
