Andrew L Dcunha
Mumbai, Aug 9: Indian markets after a brief rebound into the positive territory lost its momentum and have slipped back into the negative terrain in line with the European markets. Stocks from the software and healthcare pulled the market down.
After falling 1322 points in the past five trading days, BSE Sensex had opened very nervous this morning in line with other Asian markets with heavy selling in frontline stocks. After more than 500 points losses Sensex made a smart recovery. But this positive move was short lived. However, at close Indian market performed much better than other Asian Indices. Among Asian Indices Nikkei 225 shed 1.68%, Hang Seng fell by 5.66%
BSE Sensex closed at 16857,91 down by 132 or 0.78% and Nifty closed at 5072.85 down by 46 points.
European equity markets are showing huge swings today.
China’s inflation hit highest level in 3 years
China on Tuesday said its politically-sensitive inflation figure hit 6.5% in July, its highest level in more than three years. Analysts are also concerned Beijing might go too far in tightening monetary policy to curb prices and trigger a sharp slowdown in the world’s second-largest economy -- a key driver for other nations’ growth.
Rupee hits 11 –week low
The rupee fell to its lowest in 11 weeks on Tuesday, extending losses to as much as 2.9% over six sessions on heightened worries about foreign fund outflows as investors fled risky assets across markets. Rupee slipped to 45.40 a dollar today during early trade.
Gold hits record high Rs 26000 +/ (10 grams)
India's benchmark gold futures on the Multi Commodity Exchange extended gains by more than 3% on Tuesday morning and hit a new peak of 26,198 rupees per 10 grams, tailing a rally in the world market and on a weak rupee.
Brent Crude and US Crude slipped.
Brent crude plunged to a six-month trough below USD 99 a barrel on Tuesday in a two-session drop of nearly USD 10, after a US credit downgrade intensified fears about a global slowdown in demand for energy. Brent crude fell as much as USD 5 to USD 98.74 a barrel, the lowest intraday price since Feb. 8. It recovered to USD 101.48 by 0516 GMT, but was still more than USD 25 off an April peak above USD 127. US crude fell USD 3 to USD 78.31, after touching USD 75.71, its lowest since September 2010.
India, the world's fourth largest oil consumer, may cut petrol prices if global crude oil eases further, Oil Minister S. Jaipal Reddy said on Monday.
Federal Open Market Committee meets today
After the European Central Bank stepped in to buy Italian and Spanish government bonds in the latest attempt to deal with the euro zone debt crisis, While financial markets are spinning out of control, Investors await the Federal Open Market Committee meeting on Tuesday for clues to whether the US central bank might ease monetary policy further.
Andrew L D Cunha, Managing Director, WinWin Fin Advisory Pvt. Ltd. Mangalore. (finadvisoryltd@yahoo.com)
