Markets opened gap-down following a sell-off across Asia and profit-booking in IT shares due to resurgence of sovereign debt concerns in Europe.The Nifty touched a low of 4,967 in opening trades and was hovering at 4,980, down 76 points and the Sensex was at 16,593, down 281 points.
The Asian markets skid on Monday morning due to selling in financial shares, which were exposed to Europe. Bond risk surged to a two-year high on speculation that Germany was preparing for a default by Greece. Japan's Nikkei Stock Average declined 2%, Hong Kong's Hang Seng was down, over 3% and China Shanghai Composite was trading flat.
Back in India, the markets may remain under pressure owing to weak global cues. The Reserve Bank of India Policy, industrial output data for the month of July and advance tax numbers will also be closely watched.
The IIP data is expected around noon today. Reuter's poll expects July IIP around 6.2% against a year earlier, slower than 8.8% growth seen in June. Economists said that the growth may moderate going forward due to 11 consecutive rate hikes since March last year.
Among individual stocks, Tata Motors was on the radar after group’s Chief Executive Officer Carl Peter Forster resigned on Friday with immediate effect, after serving the company for 18 months. Tata Motors was one of the top losers on the Sensex, down over 3%.
Among the frontline shares – Infosys (down 3%), ICICI Bank (down 2.8%) and Reliance Industries (down 2%) were weighing on the Sensex, dragging the index down by almost 100 points. Only one component on the index was trading in the green, Hindustan Unilever, up over 1%.
BSE IT shares were leading the losses, the index plunged 3% on worries that clients may cut budgets in the Europe and United States. HCL Technologies was down 3%, TCS and Tech Mahindra were down over 2% each.
Metal shares also lost sheen due to global growth slowdown worries. The BSE Metal index was down 3%. NALCO plunged 5%, Sesa Goa lost 4% and Jindal Steel declined over 3%.
From the broader markets, the midcap index fell 1.2% and the smallcap index lost 1%.
The market breadth was negative; 1082 stocks declined for 261 stocks which advanced.
