The markets today opened (Sensex down 122 points) on a weak note on the back of geo-political concerns, rising oil prices and domectic political turmoil. The marekts exhibited weakness for a major part of the trading day as selling was witnessed across-the-board. The BSE benchmark index plunged to a low of 18,059 in noon deals with capital goods and rate sensitives dragging the index. However, renewed buying interest in the last session of trades saw the markets recoup some of their losses.The Sensex recovered 164 points from the day's low, but still ended with a loss of 264 points at 18,223. The NSE Nifty recovered from a low of 5408, to settle at 5,463, down 1.4%, or 76 points.
With an imminent civil war in Africa's largest oil-producing nation threatening to cut off oil supply to a significant degree, crude prices touched 2.5 year highs, thus prompting negative market sentiment due to a spike in commodity prices, which will subsequently stoke inflation.
The crisis in Libya has assumed such serios proportions that the US is contemplating tapping its own oil reserves in the face of scorching crude prices, which spiked above $106 a barrel, prompting US crude oil futures to jump 1.6%, their highest ever since 2008.
Jim Rogers, an investment expert, averred crude prices were rising due to supply constraints. He added, "Crude will continue to go higher, though there can be intermittent corrections. However, the price of oil is going to continue to rise for years to come."
At home, the pull-out of the DMK, the Congress ruling party's primary ally, from the UPA 2 coaliton, saw investor sentiment weaken on fears the propsals put forth for the infratstructure sector in the recently announced Union Budget may not see fruition.
Also, the Banking Regulation Amendment Bill, approved by the Centre on March 3, which would see the issue of new banking licences, is also in jeopardy because of the DMK's withdrawal.
At the end of the day, gainers on the Sensex were Wipro at Rs 446 and Tata Power at Rs 1,230, both up by a per cent each, and Cipla at Rs 305 up marginally by 0.4%. Losers on the index were led by auto stocks Maruti Suzuki and Tata Motors at Rs 1,265 and Rs 1,127 down 4% each, and Reliance Communications at Rs 90 down 3%.
The broader markets under-performed the benchmark, as the BSE Mid-cap index at 6,499 and the Small-cap at 7,885 both declined 1.4% each.
All the sectoral indices on the BSE were in negative territory, with the Auto index at 8,692 down nearly 3%, Capital Goods losing 2.4% at 12,645, and Realty at 2,043 down 1.7%.
Amongst the auto stocks, Ashok Leyland was the major laggard at Rs 51 and Bharat Forge at Rs 319 both down 5%,while Maruti Suzuki at Rs 1,265 closed down 4%.
Capital Goods stocks fell on the uncertainty regarding the implementation of the proposals chalked out for the infrastructure sector, which included the creation of infra debt funds to finance large-scale infra projects. Top losers on the Capital Goods index were Punj Lloyd at Rs 62 down 4.5%, Gammon India at Rs 117 and Areva T&D at Rs 256, both down 4%.
Sobha Developers at Rs 263, Orbit corp at Rs 49 and DB Realty at Rs 113, all down 34%, were the top losers in the realty space.
FMCG stocks were flat, albeit with a negative bias, at 3,502, followed by the Healthcare index at 5,833 and the PSU index at 8,506, both down nearly a per cent.
Commenting on the current market scenario, technical analyst Devangshu Datta said, "The market is obviously quite bearish, with support (for the Nifty) at 5,400, and resistance at 5,460."
The market breadth was quite negative, with 1,972 stocks declining as against 908 advancing stocks.
Other markets in Asia shut shop on a mixed note. The Nikkei shed nearly 2% at 10,505, while the Hang Seng at 23,313 declined 0.4%, and the Seoul Composite at 1,980 and Taiwan Weighted at 8,714 both shed 1%. Amongst the other major Asian indices, the Shanghai Composite ended robustly at 2,997 up 2%, and Singapore's Straits Times closed marginally in the green at 3,067.
In Europe, the CAC40 was down marginally at 4,011, while the DAX at 7,191 and FTSE 100 at 6,015 were both trading flat, with a positive bias.
