Andrew L D'Cunha
Mumbai, Oct 3: Indian markets continued their southbound journey on renewed fears of Greece default as its government stated it would miss deficit targets for 2011 and 2012. The BSE Sensex opened weak, following cues from the Asian markets. The markets continued to see volatile trade, and Sensex continued its southbound journey. The Sensex after touching a low of 16,056, closed at 16,151. Nifty is down 94 points at 4,850.
Reliance ADAG group stocks were in the green after witnessing a steep fall in the previous session on reports that the Central Bureau of Investigation (CBI) has given a clean chit to a group chairman Anil Ambani, in the structuring of different firms and transfer of funds relating to Swan Telecom, in 2G scam. Reliance Infrastructure, Reliance Capital and Reliance Communications jumped 1-3% each.
Heavyweight Reliance Industries was the leading dragger, falling 2.5%. ICICI Bank plunged 4%. SBI, HDFC Bank, Axis Bank, Kotak Mahindra Bank and PNB were down 2-3%. HDFC fell 1%. DLF was the biggest loser on Nifty, falling over 8%. SAIL, Tata Steel, Sterlite Industries, Hindalco and JPSL crashed 4-6%.
Asian stock markets slipped sharply on Monday on rising concerns of a Greek sovereign default, and with Hong Kong weighed by additional worries over China’s financial health. Hong Kong led the tumble, with the benchmark Hang Seng Index crashing below the 17,000 level within minutes of the open. Jakarta Composite dropped 5.6% and Nikkei shed 1.7% to 8,545.
European stock markets fell sharply on Monday reports Greece will not meet its deficit targets this year. A draft of the Greek government 2012 budget approved by the cabinet on Sunday showed a deficit of 8.5% of gross domestic product for 2011, which falls short of a target of 7.6%, according to media reports. The deficit will also fall short in 2012 -- 6.8% versus a 6.5% target. European markets like Britain's FTSE were down more than 1.5% each. Germany's DAX and France's CAC and fell 2.5%.
Indian Exports up by 44.2%
India's exports maintained their growth momentum in August, 2011, rising by 44.2% year-on-year to $24.3 billion. Imports, too, grew by 41.8% to $38.4 billion in August, translating into a trade deficit of $14 billion, or 3.1% of the GDP during the month.
Gold strong; Rupee weak
Gold rose by more than 1% on Monday on firm demand. The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 1.41% higher at Rs 26,685 per 10 grams, after gaining 1.4% in the previous three sessions. Demand could remain firm due to festival and marriage season.
The Indian rupee fell by 57 paise to Rs 49.53 against the US dollar in early trade today amid steep depreciation of the euro on heightened concerns over the European debt crisis.
Andrew L D'Cunha, managing director, WinWin Fin Advisory Pvt. Ltd. Mangalore. Email: finadvisoryltd@yahoo.com.