Markets recovered marginally from morning lows, but continued to remain weak due to selling in index heavyweights - Infosys, RIL and ICICI Bank. On the sectoral front metal and realty shares were leading the losses.
The Sensex touched a low of 17,220, and is now down 369 points at 17,322. The NSE Nifty has shed 115 points at 5,216.
--------------------------Updated at 09:40 hrs
Markets nose-dived in opening trades following sell-off in equities across the globe over sovereign crisis and global growth concerns. The Nifty slipped 134 points, to 5,197, and the BSE Benchmark index declined 343 points, at 17,350 at the opening bell. This was the worst market opening in nearly last two years. On November 6, 2008, the index had opened with a negative gap of 364 points.
The Sensex touched a low of 17,220, and is now down 415 points at 17,277. The NSE Nifty has shed 130 points at 5,201.
Recession jitters inflated investors anxiety after series of weak economic data raised global growth concerns. On Thursday the European Central Banks held policy rates at 1.5% and resumed the purchase of government bonds after a hiatus of four months. The ECB also announced longer term funding for banks facing cash crunch.
Overnight, Wall Street indices were battered very badly on worries of US economic health. The Dow Jones Industrial Average lost 4.3%, the biggest percent age drop since 2008. Even the Standard & Poor’s 500 Index declined 4.8% and the Nasdaq Composite Index shed 5.1%.
In Asia, the Hang Seng Index declined 4.2%, while the Shanghai Composite index plunged almost 2% and Japan’s Nikkei Stock Average also tumbled 3.4%.
Crude was heading for biggest weekly drop in three months on anticipation that growth may slow down. Brent Crude slipped 3% and was hovering around $107/ barrel Relatively saver havens like currencies such as Yen and Swiss franc, and bonds were temporarily attractive investor interest.
Analysts said that after a deep cut in opening trades markets may continue to remain under pressure until global conditions improve. India Infoline Financial Services in the morning note said, “A drop in crude is good for the Indian markets. All eyes will now be on the US monthly jobs report given the mounting concern over the health of the US economy."
Index heavyweight made deep cuts in opening trades. ICICI Bank, Infosys and L&T plummeted over 3% in the morning session. Reliance Industries slipped below Rs 800 level, down 2% to Rs 759. Only one component on the Sensex was trading in the green, ONGC was up over 0.5%.
On the sectoral front metal stocks were the worst hit following the rout in commodities globally over bleak growth outlook. Sterlite Industries, Hindalco were down almost 4% each, and Sesa Goa declined 2%. All three stocks hit 52 week low in opening trades.
Also BSE IT index slipped over 3% on concerns that outsourcing demand may get affected if clients in US and Europe resort to spending cuts. Infosys and TCS slipped over 3% each, and Wipro plunged 2.5%.
From the broader markets, the BSE midcap and the smallcap indices were down over 2.5% each.
Market breadth was extremely negative, 1664 stocks declined for 190 stocks which advanced.
