Markets weighed down by Eurozone debt crisis
The Sensex and the Nifty swung wildly to the mixed newsflows as the Euro dipped to its lowest (1.23) to the dollar in four years.
The depreciation of the euro is not a cyclical or benign depreciation, said Mr Rugved Dhumale associate vice-president, Macklai Financial and Commercial Services Ltd.
The weakness is because of lack of credit etc. The libor rate is inching up so markets are jittery and this adds to the pressure on capital availability. The rupee will come under pressure till the crisis resolves as risk averse assets will be sold by the FIIs.
The Sensex plunged triple digits following the US markets closing down 1.5 to two per cent on Friday and the Asian markets trading in the red on Monday on fears that the austerity measures in Europe may hurt their exports. In India, the IT and textile industries could take a hit as the Eurozone members are among India’s largest trading partners. The tables turned post noon when Sensex recouped most of the 450 points it lost as the European markets opened positive ahead of the European finance ministers meet.
The Sensex closed just 159 points down at 16,835.56 while the Nifty closed at 5059.90 down 33.60. The Nifty intra-day breached its 200 day moving average of 4980 and then bounced back. Mr Jigar Shah of Motilal Oswal Financial Services Ltd feel the short term moves will be dictated by international markets and the clarity on the monsoon could be the next trigger. The Nifty could trade between 4,800-5,400, say analysts.
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