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Indian markets correct following red winds from the Euro and US

August 19th, 2011

The last 36-hours have been one of the worst period in the world stock market history with a huge correction seen across the globe. It all started yesterday noon with first the European Banking stocks and later almost all sectors correcting before the fire spread to US and later to the Asian stock markets.

The Asian markets had seen some heavy correction today. Hang Seng lost 616 points. KOSPI lost 115 points. The Indian stock markets are of no difference. The European markets that opened few minutes ago have continued to show the weakness. Wall street stocks are worried about recession and it is most likely that they extend the 4.5% decline that was reported yesterday.

Back in India, the NSE Nifty has shed 98.50 points and close the day at 4845.65. BSE Sensex lost 328.12 points in trading session today and closed the day at 16141.67. The Sensex has lost near to 700 points during this week.

As usual, all sectorial indices on the NSE are in the red. IT, Banking, Sevices and Infra being the worst. Top Nifty losers of the day include Tata Motors, Infosys (both down over 5.4%), L&T, BHEL (both down over 4%), Dr Reddy, Axis Bank (both down over 3%), ICICI Bank, TCS, Sun Pharma and ITC (all down over 2%). Albeit short, the top gainers of the day are JP Associates (up 3%), DLF, Hero Motocrop, Hindalco (all up over 2%), Reliance Infra, Cipla, Tata Power, Maruti, BPCL and M&M (all up marginally).

JP Morgan says IT stocks still has some weakness less and are poised for a 5 - 10% correction. Kotak Institutional however maintains a cautious view on the FMCG sector. Kotak says markets can give 40 to 50% returns for long term investors. Citi says Indian markets look attractive for the first time since the September 2010.

Coal India and SBI are top long term buys considering they offer an attractive upside left.

Mahindra Satyam and Tech Mahindra corrected a bit but have attempted a good pull back. Mahindra Satyam (BSE: 500376; NSE: SATYAMCOMP; ISIN: INE275A01028) closed the day at Rs. 66.60. The script has swung between a low of Rs. 63.80 and a high of Rs. 67.30. Tech Mahindra (BSE: 532755; NSE: TECHM; ISIN: INE669C01028) however couldn’t recover well. The script saw an high/low of 666.00 and 622.75 and closed at 635.95 losing 3.96% in session today.

Entry Filed under: Equity Markets, IT & ITes, Closing Bell