Gain in the US markets on Monday momentarily cherished the Indian bourses as it opened on a positive gap on Tuesday. However the happiness for the investors was short lived as the key indices started heading south and remained in the negative terrain for the entire trading session. The benchmark Sensex of the Bombay Stock Exchange (BSE) dipped 476.96 points or 2.30% before closing at 20,251.09 points while the broader S&P CNX Nifty of the National Stock Exchange (NSE) slid 132.55 points or 2.14% to close at 6,074.25 points.
The US markets on Monday ended on a positive note mainly on the back of anticipation of aggressive rate cuts by Federal Reserve when the FOMC meets on January 30. However the Asian markets ended in the negative terrain on Tuesday in the wake of increasing woes about US economy.
Anita Gandhi, Head research, Arihant Capital Markets said, ?We saw some pre-emptive selling today mainly on the back of news that the Citi bank is going to write off a huge amount in the meting to be held on Tuesday. Also most of the domestic institutional investors (DIIs) and the retail investors reduced their exposure in the secondary market in order to participate in the Reliance Power IPO by selling across the sectors.?
In yet another low volume session on Tuesday, selling was witnessed across the sectors with most of the sectors losing in the range of 1.5% to 2.5%. This led to the overall markets sentiment to remain bearish and a huge negative marke breadth. Of the 2,888 stocks traded on Tuesday, only 988 stocks advanced as against 1,869 stocks closing the day in red while 31 stocks remained unchanged.
On the derivatives segment, a heavy short built up was created in the Nifty current month contract, as the open interest (OI) increased by 6.81 crore and the Nifty January series was trading at a discount of 153.35 points or 2.46% from its previous close, whileit was trading at a discount of 16 points to its spot price.