Andrew L D'Cunha

Mumbai, Sep 26: Indian markets appear totally directionless today. The BSE Sensex lost 111 points but managed to close above 16K mark to end at 16,051. Nifty ended down 32 points at 4,835. A recovery in European markets and buying in IT stocks helped the Sensex to recover around 250 points from the day's low of 15,801.

Weak cues from the Asian markets added to the woes, but a positive opening in European markets and bargain buying at lower levels helped the market recover some losses by the early afternoon trade. Amongst the sectoral indices, BSE Metal Index was down 3.15 per cent, BSE FMCG Index fell 1.73 per cent and BSE Power Index slipped 1.62 per cent.

BSE IT Index edged 0.44 per cent higher. Reliance was the biggest dragger among Sensex stocks and along with HDFC Bank and Larsen & Toubro, contributed for a 60 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 3.2% to 11,141. Hindalco and Sterlite from the metal space touched their respective 52 week lows. Hindustan Zinc, Coal India, Sesa Goa and NMDC tumbled 3-6% each.

The rupee which had strengthened by 14 paise to close at Rs 49.43/44 against the US currency on Friday fell by 16 paise to Rs 49.59 per US dollar in early trade on due to appreciation of the US currency against other major rivals overseas and a weak trend in the domestic equity market.

Asian markets ended in red with Nikkei shedding 2% to end at a 30-month closing low of 8,374. Seoul Composite and Taiwan Weighted also slipped 2.5% each. European markets are trading n green. The CAC jumped 2.89% and DAX up by 3 .48. FTSE is up 1.23% while writing this report.

Gold witnesses steep fall
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Gold suffered the steepest single day fall by plunging Rs 1,540 to touch an intra-day low of Rs 25,800 per 10 grams in the opening trade. Selling pressure sparked due to the slump in gold prices overseas, which sets the price trend on the domestic front. Trading sentiments dampened after the Gold fell by over USD 225 in Asia in the last two trading sessions, its worst two-day slump since 1983, on speculation that the European governments will struggle to contain the region's debt crisis. Gold prices closed the day at Rs 26,740 per 10 grams today, registering a loss of Rs 600. The rise in volatility taking place in the gold price was clearly an indication that gold was no longer a low-risk asset

Andrew L D'Cunha, Managing Director, WinWin Fin Advisory Pvt. Ltd. Mangalore. Email: finadvisoryltd@yahoo.com