Sensex ends down 125 pts

The Sensex has ended (provisional) at 16,036 - down 125 points. Nifty ends down 35 points at 4,833.
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(Updated at 1429 hrs)

Markets managed to recover from the lowest point of the day, but remained in the red in late-noon trades. The Sensex, after touching a low of 15,801 managed to recover 230 points. The index was down 127 points at 16,034. Nifty was down 37 points at 4,830.

Global markets are in the red as doubts resurfaced whether Europe's politicians can deliver a rescue programme big and bold enough to stop its sovereign debt crisis from morphing into a major financial disaster. Asian markets ended in red with Nikkei shedding 2% to 8,374. The Japanese markets had earlier fallen to six-month lows. Seoul Composite and Taiwan Weighted also slipped 2.5% each. European markets, however, traded in green. The CAC and DAX added 1.7% each.

Among other news, market regulator, Sebi notified the new takeover code which makes it mandatory for entities buying more than 25% stake in a listed firm to buy an additional 26% from the public.

Larsen & Toubro was the biggest dragger among Sensex stocks and along with HDFC Bank and ITC, contributed for a 55 points fall in the Sensex.

Metal stocks dropped, mirroring a 3.2% drop in the London Metal Exchange on Friday. The BSE metal index dropped 3% to 11,152. Hindalco and Sterlite from the metal space touched their respective 52 week lows. hindustan Zinc, Coal India, Sesa Goa and NMDC shed 3-7% each.

"Metals are continously making lower top and bottom formation, particular Hindalco, Sesa Goa and Sterlite looking still weak, and Auto and Banking showing some signs of resilience," said Navneet Daga, Derivative Analyst, KR Choksey Securities.

IT stocks were marginally in red as the rupee continued to weaken against the dollar. The index was down 0.2% at 4,974. Wipro bucked trends and gained 1% to 341. However, Financial Technologies, MphasiS, Tech mahindra and Patni Computers continued to reel under pressure.

The market may remain volatile this week as traders roll over positions in the futures & options segment on Thursday. Markets would be looking at the Q2 corporate numbers for direction. IT heavyweight, Infosys, is set to announce their quarterly numbers on October 12, 2011.

Meanwhile, some buying action was witnessed in Jaiprakash Associates, Bharti Airtel and ICICI Bank. The stocks moved up 1-2% each in trades.

BSE market breadth was negative. Out of 2,767 stocks traded, 2,030 have declined while 643 have advanced.